BOOKKEEPING  SYSTEM 

FOR 

DELCO-LIGHT  DEALERS 


Gift 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

HENRY  RAND  HATFIELD 
MEMORIAL  COLLECTION 


PRESENTED  BY 

FRIENDS  IN  THE  ACCOUNTING 

PROFESSION 


HENRY  R.  HATRELC 

2695  LE  CONTE  AVENUE 
BERKELEY     CALIFORNIA 


BOOKKEEPING  SYSTEM 
for  DELCO-LIGHT  DEALERS 

A  Descriptive  Booklet 


Price,  $1.50 


By 

ROBERT  D.  FUNKHOUSER 


Copyright 

December,  1919 

By  Robert  D.  Funkhouser 

Dayton,  Ohio 

U.  S.  A. 


All  rights  reserved 


HFS(pdC 
SSff 


CONTENTS 

Chapter  pa?e 

I.  General  Reasons  for  Keeping  Accounts    -------  5 

II.  Why  Delco-Light  Dealers  Should  Keep  Books  of  Account  -        -        -        -  9 

III.  General  Description  of  Dealers  Bookkeeping  System  -----  11 

IV.  Fundamental  Bookkeeping  Terms    --------  13 

V.  Suggested  Card  of  Accounts   ---------  20 

VI.  Explanation  of  Accounts         _________  30 

VII.  The  Bookkeeping  Set  Proper  ---------  49 

VIII.  The  Transfer  and  Financial  Statement  Binder   ------  57 

IX.  Customers'  Invoices       ___-_-----  58 

X.  Inventory  Cards    -----------  60 

XL  Work  Orders        -----------  61 

XII.  Financial  Statements     ----------  64 

XIII.  Other  Records  Required         _________  68 

XIV.  The  Right  Way  to  Keep  Books        _____---  72 
XV.  General  Suggestions      ----------  74 

XVI.  Pertinent  Quotations     ----------  83 

XVII.  Reproduction  of  Forms  ----------  97 

XVIII.  Example  of  Complete  Financial  Statement       -        -        -        -        -        -  116 

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BOOKKEEPING  SYSTEM  FOR  DELCO- LIGHT  DEALERS 

CHAPTER  I 

GENERAL  REASONS  FOR  KEEPING  ACCOUNTS 

There  are  always  at  least  three  principal  reasons  why  business  men  should  keep  proper 
books  of  account.    These  are — 

1.  That  the  business  may  be  conducted  profitably. 

2.  That  an  accurate  and  acceptable  financial  statement  may  be  made  when  credit  is  sought. 

3.  That  necessary  tax  reports  may  be  intelligently  prepared. 

1.     Profitable  Conduct  of  Business 

The  primary  object  of  all  business  enterprises  is  to  make  a  satisfactory  net  profit;  and  since 
it  is  true  that,  as  a  rule,  an  accurate  knowledge  of  facts  is  essential  to  the  profitable  conduct  of  a 
business,  then  it  is  certainly  right  and  proper  that  sufficient  time,  energy  and  expense  be 
devoted  to  the  building  up  of  essential  records  in  order  that  the  owner  of  the  business  may  be 
in  possession  of  actual  facts. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

It  has  recently  been  said  by  a  writer  in  one  of  the  credit  magazines,  that  "more  country 
merchants  fail  because  of  faulty  bookkeeping — or  worse  yet,  no  bookkeeping  at  all — than  from 
all  other  causes  combined."  In  Great  Britain,  the  failure  of  a  man  engaged  in  business  to  keep 
books  of  account,  is  a  statutoiy  offense ;  and  the  relative  indifference  to  date  of  American  busi- 
ness men  to  this  most  important  subject,  is  difficult  to  explain. 

It  may  possibly  be  due  to  the  general  belief  that  bookkeeping  or  accounting  is  a  highly 
technical  and  precise  science  which  only  trained  bookkeepers  can  be  expected  to  understand ; 
and  it  is  undoubtedly  true  that  "the  art  of  applying  arithmetic  to  business,  requires  more  study 
and  discrimination  than  does  the  science  itself" ;  however,  a  considerable  misapprehension  of 
the  facts  in  this  respect  commonly  prevails,  as  it  is  true  of  bookkeeping  and  accounting,  at  least 
in  simpler  forms,  as  well  as  of  many  other  practices,  that  very  much  of  the  imaginary  mystery 
with  which  these  operations  are  ordinarily  regarded,  disappears  when  a  little  intensive  study 
and  close  application  are  applied  to  the  principles  involved. 

Statistics  of  the  Government  and  of  the  mercantile  agencies  show  that  over  eighty  per  cent 
of  the  business  failures  are  due  to  preventable  causes — chiefly  business  inefficiency  caused  by 
lack  of  knowledge  of  fundamental  laws  and  procedure ;  and  it  is  somewhat  startling  to  realize 
that  this  condition  prevails  not  only  in  business  enterprises  conducted  by  small  merchants  and 
manufacturers,  but  by  partnerships  and  corporations  as  well. 

The  Federal  Trade  Commission  is  authority  for  the  statement  that  most  American  business 
men  do  not  know  enough  about  the  operations  of  their  business  to  furnish  even  elementary  statis- 
tical information ;  and  it  is  only  reasonable  to  suppose  that  business  embarrassment  and  disaster 

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BO  OKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

are  a  direct  result  of  ignorance  of  conditions,  due,  in  a  large  measure,  to  the  absence  of  proper 
books  of  account. 

The  author  of  a  recent  article  on  the  subject,  "Why  Business  Men  Fail,"  states  that  "the 
greatest  error  made  in  business  is  the  refusal  to  face  facts."  Books  of  account  record  facts; 
therefore,  it  is  necessary  for  a  successful  business  man  to  keep  books  of  account  to  enable  him 
to  know  what  his  business  is  doing. 

2.     Presentation  of  Accurate  and  Acceptable  Financial  Statements 

Practically  all  business  men  find  it  advisable,  if  not  absolutely  necessary,  to  borrow  con- 
siderable sums  of  money,  at  least  during  certain  seasons  of  the  year.  Of  course,  they  might  be 
able  to  handle  their  business  in  a  less  progressive  and  less  expansive  way,  by  not  borrowing 
money  and  by  restricting  the  volume  of  their  business  to  capital  which  they  actually  possess. 
This,  however,  is  not  the  modern  method  of  doing  business.  If  large  corporations  with  millions 
of  capital  invested  in  their  business  find  it  advantageous  to  borrow  large  sums  of  money,  it 
seems  reasonable  that  smaller  enterprises  can  do  a  larger  and  more  profitable  business  by  fol- 
lowing a  similar  practice. 

When  it  becomes  desirable  to  borrow  money  at  a  bank,  almost  the  first  requirement  is  the 
presentation  of  an  accurate  financial  statement.  This  is,  therefore,  an  additional  and  very  valid 
reason  why  proper  records  of  all  business  transactions  should  be  maintained. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


3.     Preparation  of  Tax  Reports 

In  addition  to  state  and  county  tax  returns  customarily  required,  all  manufacturers,  mer- 
chants and,  in  fact,  business  men  of  every  character,  have  been  required  for  a  number  of  years 
past  to  prepare  and  submit  annual  income  tax  returns  to  the  Federal  authorities ;  and  this  duty 
cannot  possibly  be  fulfilled  without  recourse  to  books  of  account  which  accurately  reveal  the 
transactions  which  have  taken  place  during  the  previous  year.  The  keeping  of  books  has, 
therefore,  become  an  absolute  requirement  by  Federal  tax  authorities ;  and  this  alone  is  a  suffi- 
cient reason  for  the  establishment  and  maintenance  of  correct  records. 


PaR.'  S 


CHAPTER  II 

WHY  DELCO-LIGHT  DEALERS  SHOULD  KEEP 
BOOKS  OF  ACCOUNT 

All  of  the  reasons  given  in  the  preceding  chapter  certainly  apply  to  Delco-Light  Dealers,  as 
well  as  to  business  men  engaged  in  other  undertakings.  An  additional  reason  also  applies, 
namely,  that  Dealers  may  determine  what  their  net  operations  covering  any  given  period  have 
been,  so  they  may  know  whether  or  not  the  business  in  which  they  are  engaged  is  profitable 
and  to  what  extent.  This  is  especially  important  in  a  new  business  such  as  ours.  Since  this 
business  is  profitable  for  Dealers,  as  has  already  been  demonstrated  in  hundreds  of  instances, 
there  is  no  reason  why  every  Dealer  should  not  be  successful,  provided,  of  course,  the  principal 
requirements  are  fulfilled. 

A  danger  always  exists,  where  proper  books  of  account  are  not  kept,  that  household  ex- 
penses, personal  investments,  the  payment  of  old  debts,  or  other  similar  expenditures,  may  be 
absorbed  by  the  business  proper  and  an  otherwise  profitable  undertaking  may  thus  show  an 
unsatisfactory  net  result. 

This  is  manifestly  unfair ;  and  the  Company  is  extremely  anxious  that  all  Dealers  engaged 
in  selling  Delco-Light  Products  correctly  determine  for  themselves  the  profitableness  of  the 
business  in  which  they  are  engaged,  by  the  establishing  and  keeping  of  records  which  will 
reveal  the  true  situation  at  any  time.  It  is  rarely  right  or  proper  to  judge  a  business  alone  by 
the  amount  of  money  that  may  be  on  hand  at  the  end  of  the  year. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


The  Delco-Light  business  in  all  its  complexity  and  diversification,  offers  a  splendid  chal- 
lenge to  its  Dealers,  to  become  real,  all-round  business  men,  one  chief  attribute  of  whom  is  the 
ability  to  read  and  understand  financial  statements,  especially  those  pertaining  to  the  business 
in  which  they  are  engaged. 


Page  10 


CHAPTER  III 

GENERAL   DESCRIPTION  OF  DEALERS 
BOOKKEEPING  SYSTEM 

In  order  to  supply  a  quite  general  demand  on  the  part  of  Delco-Light  Dealers  for  a  method 
of  recording  financial  facts  in  an  approved  accounting  manner  and  at  the  same  time  in  a 
simple  and  convenient  form,  a  complete  Dealers  Bookkeeping  System  has  been  devised  which 
we  believe  is  suitable,  or  at  least  readily  adaptable  to  the  requirements  of  any  Dealer  in  the 
business,  either  large  or  small. 

It  must  be  borne  in  mind  that,  as  a  matter  of  fact,  there  is  no  such  thing  as  an  absolutely 
simple  bookkeeping  system  for  any  business  which  is  at  all  complicated  and  is  involved  with 
any  considerable  number  of  details;  however,  "if  accuracy  is  the  twin-brother  of  honesty,"  and 
"if  right  methods  are  necessary  for  the  attainment  of  any  desirable  thing,"  we  believe  the 
"Bookkeeping  System"  herein  presented,  if  properly  kept,  will  make  possible  the  determination 
of  all  essential  features  of  the  business  with  the  minimum  expenditure  of  time  and  energy. 

The  complete  system,  in  addition  to  this  descriptive  booklet,  consists  of  the  following: 

1.  The  Bookkeeping  Set  Proper,  with  standard  loose-leaf  binder  and  200  ruled  and  printed 
sheets,  properly  assembled  under  eight  different  section  headings,  with  appropriate 
index  tabs, 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


2.  A  Transfer  and  Financial  Statement  Binder,  which,  in  addition  to  providing  index 
leaves  under  which  all  sheets  taken  from  the  current  binder  may  be  permanently  filed, 
contains  ruled  and  printed  Balance  Sheet  and  Profit  and  Loss  Statement  blanks,  good 
for  twelve  months'  operations, 

3.  A  Supply  of  Customers'  Invoices, 

4.  A  Supply  of  Inventory  Cards, 

5.  A  Supply   of  Work  Orders, 

6.  A  Supply  of  Financial  Statements, 

all  of  which  are  later  described  in  detail. 

For  the  benefit  of  those  Dealers  who  are  interested  in  having  some  of  the  mystery  of  book- 
keeping dissolved  and  before  proceeding  with  the  detailed  explanation  of  this  particular 
bookkeeping  system,  we  will  repeat  here  a  few  elementary  and  fundamental  bookkeeping 
principles  and  statements  which  are  important. 


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CHAPTER  IV 

FUNDAMENTAL  BOOKKEEPING  TERMS 

There  are  only  four  really  different  kinds  of  accounts: 

1.  Assets — What  you  own. 

2.  Liabilities — What  you  owe. 

3.  Income  Accounts — Revenue  derived  from  operations. 

4.  Expense  Accounts — Operating  costs. 

The  excess  of  Total  Assets  over  Total  Liabilities  represents  the  Net  Worth  of  a  business ; 
while  the  excess  of  Total  Income  over  Total  Expenses  represents  the  Net  Profits  for  any 
given  period. 

The  excess  of  Liabilities  over  Assets  would,  of  course,  show  the  extent  to  which  any  busi- 
ness was  insolvent ;  and  the  excess  of  Expenses  over  Income  would  show  the  loss  or  Deficit 
in  operations  for  the  period. 

Income  and  Expense  Accounts  are  always  closed  into  Profit  and  Loss  Account  at  the  end 
of  the  fiscal  period,  at  which  time  the  Profits,  if  undistributed,  become  a  part  of  the  Net 
Worth  of  the  business. 

Asset  and  Liability  Accounts,  that  is,  net  balances  shown  therein,  are,  of  course,  always 
carried  over  at  the  end  of  the  fiscal  year  to  the  following  year's  operations. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Bookkeeping  is  the  organized  act  of  recording  business  transactions  in  terms  of  money. 
Accounting  is  scientific  bookkeeping. 

A  Trial  Balance  consists  of  the  listing  of  all  open  ledger  balances  in  respective  debit  and  credit 
columns,  usually  at  the  end  of  a  month,  quarter,  year,  or  other  accounting  period,  for  the 
purpose  of  determining  that  the  sum  total  of  all  debits  equals  the  sum  total  of  all  credits. 
When  this  equality  is  ascertained,  the  books  are  said  to  be  "in  balance,"  and  the  mathemat- 
ical accuracy  of  all  transactions  involved  is  assumed. 

A  Balance  Sheet  is  the  orderly,  systematic  arrangement  in  approved  accounting  form,  under 
respective  headings,  of  all  Asset  and  Liability  Accounts  appearing  in  the  trial  balance.  It 
is  designed  to  reflect  the  true  condition  of  a  business  on  a  definite  date  and  to  make  con- 
venient a  ready  determination  of  the  relation  of  all  essential  values  represented  therein. 
Total  Assets  must,  of  course,  always  equal  Total  Liabilities  and  Net  Worth. 

A  Profit  and  Loss  Statement  is  the  logical  arrangement  of  all  Trading,  Income  and  Expense  Ac- 
counts in  such  form  that  it  conveniently  shows  the  net  result  of  the  operation  of  a  business 
during  a  given  fiscal  period,  usually  a  month,  quarter,  or  year.  The  excess  of  Income  over 
Expenses  constitutes  a  Profit;  the  reverse,  a  Loss  or  Deficit. 

Gross  Profits  or  Total  Earnings  are  the  total  of  all  income. 

Net  Profits  or  Net  Earnings  are  the  residue  of  Gross  Profits,  after  deduction  of  Total  Expenses. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Books  of  Account  Are  Opened  by  entering  in  the  journal  a  record  of  all  assets  possessed  or 
acquired  and  all  liabilities  outstanding  or  incurred  as  of  a  given  date.  This  record  is  usu- 
ally determined  by  taking  an  inventory  of  such  values. 

Books  of  Account  Are  Closed  usually  only  at  the  end  of  the  fiscal  year,  by  closing  out  all 
Income  and  Expense  Account  net  balances  to  Profit  and  Loss  Account.  After  this  is  done, 
only  Asset  and  Liability  Accounts  remain,  whose  net  balances  are  always  carried  over  to 
the  subsequent  fiscal  period.  In  order  to  insure  the  fact  that  the  books  are  "in  balance," 
it  is  customary  and  desirable  to  take  trial  balances  both  immediately  before  and  after  clos- 
ing the  books. 

A  Debit  is  a  bookkeeping  account  indicating  either: 

1.  Value  owned  (Assets), 

2.  Expense  incurred  (Expenses), 

3.  Loss  sustained  (Deficit). 

Debits  are  the  opposite  of  credits  and  are  always  carried  on  the  left  side  of  ledgers  or 
other  books  of  account. 

Two  General  Rules:     1.  "Debit  on  the  left  what  comes  in." 

2.  "Debit  the  account  that  stands  for  the  thing  received,  or  for 
the  person  or  thing  that  costs  value." 

A  Debtor  is  one  who  owes  or  is  in  debt  to  another  person  or  business. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

A  Credit  is  a  bookkeeping  account  indicating  either : 

1.  Debt  owed  (Liability), 

2.  Investment  (Capital), 

3.  Income  received  (Income),  or 

4.  Profit  realized  (Profit) . 

Credits  are  the  opposite  of  debits  and  are  always  carried  on  the  right  side  of  ledgers  or 
other  books  of  account. 

Two  General  Rules:     1.  "Credit  on  the  right  what  goes  out." 

2.  "Credit  the  account  that  stands  for  the  thing  given,  or  for  the 
person  or  thing  that  produces  value." 

A  Creditor  is  one  to  whom  an  account  or  a  debt  is  due  by  another  person  or  business. 

A  Receivable  Account  or  Note  is  one  due  or  owing  to  the  business  in  which  it  is  so  shown. 

A  Payable  Account  or  Note  is  the  opposite  of  the  above,  or  one  owing  or  due  by  the  business 
in  which  it  is  so  carried. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Posting  is  a  bookkeeping  term  indicating  the  transfer  of  an  account  from  a  book  of  original 
entry  to  a  ledger. 

Depreciation  is  decrease  in  value  of  any  asset  due  to  impairment  as  a  result  of  age,  use  and 
ordinary  wear  and  tear. 

A  Reserve  Account  is  a  credit  established  on  the  books  for  some  special  future  use.  Its  usual 
purpose  is  to  absorb  anticipated  or  contingent  charges  which  cannot  be  accurately  deter- 
mined in  advance  of  the  actual  expenditure. 

An  Accrued  Account  is  a  credit  created  on  the  books  to  provide  for  a  future  charge  or  dis- 
bursement which  has  been  or  can  be  definitely  determined  in  advance. 

A  Controlling  Account  is  a  general  ledger  account  which  represents  in  total  a  number  of  indi- 
vidual component  accounts  which  are  usually  recorded  in  a  subsidiary  ledger.  It  provides 
the  advantage  of  freeing  the  general  ledger  from  a  multiplicity  of  accounts  of  the  same 
tenor  and  effect  and  facilitates  the  promptness  and  ease  with  which  general  ledger  bal- 
ances may  be  secured. 

Controlling  accounts  always  require  double  posting — one  to  the  controlling  account  in 
the  general  ledger,  the  other  to  the  controlled  account  in  the  subsidiary  ledger. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


The  Production  Cost  of  an  article  consists  of  all  material,  labor  and  expense  incident  to  the 
manufacture  or  production  of  such  an  article. 

Overhead  Expenses  in  a  mercantile  business  consist  of  all  operating  expenses  of  the  business — 
not  including,  of  course,  the  cost  of  goods  handled  or  sold. 

The  Turnover  is  the  total  cost  of  all  goods  sold  during  the  year,  divided  by  the  cost  of  the 
average  stock  of  goods  carried  on  hand  during  the  year. 

Inventory  in  bookkeeping  may  have  three  different  meanings : 

1.  It  may  refer  to  an  account  otherwise  called  a  Stock  or  Stores  Account; 

2.  It  may  refer  to  the  record  as  a  whole  of  all  goods  on  hand ;  and 

3.  It  frequently  means  the  act  of  counting  and  weighing  all  goods  on  hand  at  a  stated  time, 

for  the  purpose  of  determining  the  actual  cost  value  of  all  such  goods. 

Sales  in  accounting  terms  refers  to  the  volume  of  merchandise  or  manufactured  products  shipped 
and  invoiced  to  bona  fide  customers  during  any  period.  Sales,  in  this  sense,  are  frequently 
alluded  to  as  "Sales  Billed,"  to  definitely  and  clearly  distinguish  them  from  "Sales  Booked," 
meaning  the  total  sales  value  of  bona  fide  orders  received,  or  booked,  during  a  period.  It 
should  be  carefully  noted  that  "Sales  Billed"  and  not  "Sales  Booked"  is  the  Trading  Ac- 
count upon  which  the  determination  of  Gross  Profits  and  consequently  of  Net  Profits,  is 
always  based. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

A  Card  of  Accounts  is  an  arrangement  in  Balance  Sheet  and  Profit  and  Loss  Statement  order, 
of  all  Asset,  Liability,  Trading,  Income  and  Expense  Accounts.  The  purpose  of  the  card 
of  accounts  is  to  provide  a  pattern  for  the  shaping  and  construction  of  the  bookkeeping  sys- 
tem with  which  it  is  concerned.  It  anticipates  and  contains  all  principal  and  subsidiary 
ledger  accounts  with  which  the  business  is  expected  to  deal  and  in  this  way  greatly  facil- 
itates the  intelligent  and  accurate  keeping  of  the  books.  It  is  quite  customary  to  have  all 
the  accounts  numbered  in  serial  order  with  reasonable  provision  for  new  accounts  which 
it  may  be  necessary  to  add  under  proper  headings  from  time  to  time.  Cards  of  account  re- 
veal at  a  glance  a  true  perspective  of  the  accounting  system  to  which  they  apply  and  con- 
siderably facilitate  a  recognition  and  an  understanding  of  the  relation  of  all  accounts  to 
each  other  and  to  the  system  as  a  whole. 


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CHAPTER  V 

SUGGESTED  CARD  OF  ACCOUNTS 

The  following  card  of  accounts  has  been  designed  for  use  in  connection  with  the  bookkeep- 
ing system  for  Delco-Light  Dealers  herein  described ;  and  it  is  believed  it  furnishes  practically 
all  accounts  with  which  any  Dealer's  business  will  be  concerned.  The  object  has  been  to  provide 
sufficient  details  to  make  the  system  complete  and  satisfactory,  although  considerably  greater 
amplification  of  accounts  could  have  been  made.  Of  course,  those  accounts  which  it  may  not 
be  desirable  or  necessary  for  any  Dealer  to  use,  can  easily  be  omitted  from  the  system  which 
he  operates.    Its  general  classification  is  as  follows : 

ASSETS 

These  accounts  are  divided  into  three  main  divisions: 

1.  Fixed  Assets,  with  detailed  accounts  numbered  from  11  to  29,  inclusive. 

2.  Current  Assets,  with  accounts  numbered  from  31  to  79,  inclusive. 

3.  Prepaid  Assets,  with  accounts  numbered  from  81  to  89,  inclusive. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

LIABILITIES  AND  NET  WORTH 

These  accounts  also  are  divided  into  three  main  classifications : 

1.  Fixed  Liabilities,  with  accounts  numbered  from  101  to  109,  inclusive. 

2.  Current  Liabilities,  with  accounts  numbered  from  111  to  129,  inclusive. 

3.  Net  Worth,  with  accounts  numbered  from  181  to  189,  inclusive. 

TRADING  ACCOUNTS 

Trading  Accounts  dealing  with  sales,  cost  of  goods  sold  and  gross  profits  on  sales,  are  clas- 
sified under  Accounts  201  to  301,  inclusive. 

PROFIT  AND  LOSS  ACCOUNTS 

These  accounts  are  sub-divided  into  two  main  classes : 

1.  Income  Accounts,  numbered  from  301  to  309,  inclusive. 

2.  Expense  Accounts,  which  are  sub-divided  into  Selling  Expenses,  Accounts  401  to  499, 
inclusive;  and  General  Expenses,  Accounts  501  to  599,  inclusive. 

The  complete  card  of  accounts  follows : 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Fixed  Assets 


Detailed  Card  of  Accounts  for  Delco-Light  Dealers 
ASSETS 


Account  No.  Name 

11  _  _  _  Land 

12  -  -  -  Buildings 

13  _  _  _  Permanent  Fair  Exhibit  Buildings 

14  -  -  -  Building  Improvements  and  Betterments 

16  -  -  -  Machinery  and  Shop  Equipment 

17  -  -  -  Furniture  and  Fixtures 

18  -  -  -  Demonstrating  Equipment 

19  _  _  _  Automobiles  and  Motor  Trucks 

26  -  -  -  Reserve  for  Depreciation  of  Fixed  Assets  (Credit) 

27  _  _  _  Good  Will  and  Development 

29     -  -  -  TOTAL  FIXED  ASSETS 

Current  Assets 

31  _  _  _  Cash  in Bank 

32  -  -  -  Cash  in Bank 

33  -  -  -  Imprest  Fund 

34  -  -  -  Postage,  Car-Fare  and  Revenue  Stamps 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  Name 

36  -  -  -  Accounts  Receivable  (Debtors'  Accounts) 

37  -  -  -  Notes  Receivable 

38  —  -  -  Trade  Acceptances  Receivable 

39  -  -  -  Prospective  Commissions  Receivable 

40  -  -  -  Credit  Balance  with  Distributor 

41  -  -  -  Advanced  Expense  Accounts 

42  -  -  -  Personal  Accounts 

43  -  -  -  Debit  Balances  on  Creditors'  Accounts,  or  Accounts  Payable 

46  -  -  -  Reserve  for  Uncollectable  Receivables  (Credit) 

51  -  -  -  Inventory — Plants  and  Batteries 

52  -  -  -  Inventory — Pumps 

53  —  —  —  Inventory — Accessories 

54  -  -  —  Inventory — Wiring  Material 

55  -  -  -  Inventory — Fixtures 

56  -  -  -  Inventory — Service  Parts 

57  -  -  -  Inventory — Miscellaneous 

59  -  -  -  Goods  in  Transit 

60  -  -  -  Consignment  Inventory  (Belonging  to  Others) 

66  -  -  -  Consigned  Goods  (In  Hands  of  Others) 

71  -  -  -  Investments 

79  _  _  _  TOTAL  CURRENT  ASSETS 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Prepaid   Assets 

Account  No.  Name 

81     -     -     -     Interest  Prepaid 


82     -     -  -  Insurance  Prepaid 

89     -     -  -  TOTAL  PREPAID  ASSETS 

99     _     _  _  TOTAL  ASSETS 

LIABILITIES  AND  NET  WORTH 
Fixed  Liabilities 

101  -     -  -  Mortgages 

102  -     -  -  Long  Term  Notes 

109     -     -  -  TOTAL  FIXED  LIABILITIES 

Current  Liabilities 

111  _     _  _  Accounts  Payable    (Creditors'  Accounts) 

112  -    -  -  Notes  Payable 

113  _     _  _  Trade  Acceptances  Payable 

114  _     _  _  Prospective  Commissions  Payable 

115  _     _  _  Credit  Balances  on  Debtors' Accounts,  or  Accounts  Receivable 

118     -     -  -  Consigned  Goods  (Belonging  to  Others) 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  Name 

121  -     -  -  Accrued  Salaries  and  Wages 

122  -     -  -  Accrued  Taxes 

123  -     -  -  Accrued  Interest 

129     -     -  -  TOTAL  CURRENT  LIABILITIES 

Net  Worth 

181  -     -  -  Capital  or  Investment — Original 

182  -     -  -  Capital  or  Investment — Additions 

186  -     -  -  Profit  and  Loss 

187  -     -  -  Surplus 

189     -     -  -  TOTAL  NET  WORTH 

199     __  _  TOTAL  LIABILITIES  AND  NET  WORTH 

TRADING  ACCOUNTS 

201  -     -  -  Sales  of  Plants  and  Batteries 

202  -     -  -  Sales  of  Pumps 

203  -     -  -  Sales  of  Accessories 

204  -     -  -  Sales  of  Wiring  Material 

205  -     -  -  Sales  of  Fixtures 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  Name 

206  -  -  -  Sales  of  Service  Parts 

207  -  -  -  Miscellaneous  Sales 

209  -  -  -  GROSS  SALES    (BILLINGS) 

211  -  -  -  Cost  of  Plants  and  Batteries  Sold 

212  -  -  -  Cost  of  Pumps  Sold 

213  -  -  -  Cost  of  Accessories  Sold 

214  -  -  -  Cost  of  Wiring  Material  Sold 

215  -  -  -  Cost  of  Fixtures  Sold 

216  -  -  -  Cost  of  Service  Parts  Sold 

217  -  -  -  Cost  of  Miscellaneous   Sales 

219  _  _  _  TOTAL  COST  OF  GOODS  SOLD 

221  -  -  -  Gross  Profit  on  Plants  and  Batteries 

222  -  -  -  Gross  Profit  on  Pumps 

223  -  -  -  Gross  Profit  on  Accessories 

224  -  -  -  Gross  Profit  on  Wiring  Material 

225  -  -  -  Gross  Profit  on  Fixtures 

226  -  -  -  Gross  Profit  on  Service  Parts 

227  -  -  -  Gross  Profit  on  Miscellaneous  Sales 

301  -  -  -  GROSS  PROFITS  ON  SALES 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


PROFIT  AND  LOSS  ACCOUNTS 


Income  Accounts 


Account  No.  Name 

301  -  -  -  Gross  Profits  on  Sales 

302  -  -  —  Interest  on  Receivables 

303  -  -  -  Interest  on  Bank  Deposits 

304  -  -  -  Income  from  Investments 

305  -  -  -  Cash  Discount  on  Purchases 

306  -  -  -  Miscellaneous  Income 

309  -  -  -  GROSS  PROFITS    (TOTAL  EARNINGS) 


Selling  Expenses 


401  -  -  -  Salary  of  Dealer  (Part) 

402  -  -  -  Salaries  of  Salesmen 

403  -  -  -  Commission  to  Salesmen 

404  -  -  -  Prizes  and  Awards  to  Salesmen 

405  -  -  -  Traveling  Expenses 

406  -  -  -  Conventions  and  Schools 

408  -  -  —  Advertising  and  Printed  Matter 

409  -  -  -  Posters  and  Signs 

410  -  -  -  Fairs  and  Exhibits 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  Name 

412  -     -  -  Service  Salaries  and  Wages 

413  -     -  -  Service  Material 

414  -    -  -  Service  Expenses 

416  -     -  -  Shipping,  Warehouse  and  Drayage  Expenses 

417  -     -  -  Freight,  Express  and  Parcels  Post 

418  -     -  -  Garage  Expenses 

421     -     -  -  Breakage,  Claims  and  Adjustments 

429     -     -  -  Miscellaneous  Selling  Expenses 

499     __  _  TOTAL  SELLING  EXPENSES 


General  Expenses 


501 

_ 

-     Salary  of  Dealer  (Part) 

502 

-     - 

-     Salaries  of  Bookkeeper  and  Clerks 

503 

-     - 

-     Office  Expenses  (or  Store) 

504 

-     - 

-     Rent 

505 

-     - 

-     Light,  Heat,  Power  and  Water 

506 

-     - 

-     Telephone,   Telegraph   and  Postage 

507 

-     - 

-     Insurance 

508 

-     - 

-     Taxes 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  Name 

509  -  -  -  Interest,  Discount  and  Exchange 

510  -  -  -  Repairs  and  Renewals 

511  -  -  -  Depreciation  of  Fixed  Assets 

512  -  -  -  Uncollectable  Accounts 

519     -  -  -  Miscellaneous  Administrative  Expenses 

599     -  -  -  TOTAL  GENERAL  EXPENSES 


Page  29 


CHAPTER  VI 

EXPLANATION    OF  ACCOUNTS 

FIXED  ASSETS 

Accounts  Nos.  11, 12, 13, 14, 16, 17, 18  and  19— Land ;  Buildings;  Permanent  Fair  Exhibit  Build- 
ings; Building  Improvements  and  Betterments;  Machinery  and  Shop  Equipment;  Furniture 
and  Fixtures;  Demonstrating  Equipment;  Automobiles  and  Motor  Trucks,  respectively: 
Debit  these  accounts  with  the  value  or  cost  of  such  permanent  investments  as  may  be 
owned  or  at  any  time  acquired,  likewise  credit  these  accounts  respectively  with  any  sales 
of  such  permanent  equipment  when  they  take  place.  The  balances  are  always  debits  and 
represent  respectively  the  money  invested  in  these  so-called  fixed  or  permanent  assets. 

Account  No.  26 — Reserve  for  Depreciation  of  Fixed  Assets  (Credit)  :  This  account  should  be 
credited  monthly,  quarterly  or  yearly  with  a  certain  per  centum  of  the  value  of  the  fixed 
assets,  at  which  time  Account  No.  511  should  be  debited  with  the  same  amount.  The  basis 
of  this  entry  should  be  determined  by  the  anticipated  life  of  the  various  fixed  assets,— depre- 
ciation of  such  equipment  usually  running  from  five  to  twenty-five  per  centum  per  year. 
This  account  in  the  balance  sheet  should  be  subtracted  from  the  sum  total  of  all  fixed  assets 
preceding  it, — the  remainder  being  the  net  value  of  such  fixed  assets  at  the  time  the  state- 
ment is  rendered. 

Account  No.  27— Good  Will  and  Development:  This  account  should  only  be  used  in  exceptional 
instances, — it  being  provided  for  the  purpose  of  taking  care  of  any  money  outlay  which 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

takes  place  at  the  time  Dealerships  change,  provided  a  real,  tangible  good  will  and  devel- 
opment account  has  been  created.  This  is  an  intangible  account  and  is  usually  looked 
upon  with  considerable  question  by  bankers;  therefore,  do  not  use  it  unless  absolutely 
necessary. 

Account  No.  29 — Total  Fixed  Assets:  No  ledger  account  by  this  name  will  be  carried, — the 
sum  of  all  fixed  assets  always  appearing  as  such,  as  a  sub-total  on  the  balance  sheet. 

CURRENT  ASSETS 

Account  No.  31 — Cash  in Bank:    All  original  cash  capital,  all  cash  additions  of  capital 

and  all  cash  receipts  from  the  business  should,  from  time  to  time,  be  deposited  and  kept  in 
a  bank  account,  at  which  time  this  account  will  be  debited  with  such  deposits.  Likewise, 
all  money  should  be  paid  out  by  bank  check,  at  which  time  this  account  will  be  credited. 
The  balance  of  this  account  should  always  be  a  debit,  representing  funds  remaining  in  the 
bank  account.  When,  if  ever,  this  account  shows  a  credit  balance,  it  indicates  an  over- 
draft in  the  bank  account.  Account  No.  32  is  provided  in  the  event  a  second  bank  account 
is  maintained. 

Account  No.  33 — Imprest  Fund:  In  order  to  provide  cash  as  an  office  or  petty  fund,  it  is 
desirable  to  withdraw  $10,  $25,  or  $50  from  the  bank  by  check  and  carry  same  con- 
stantly as  an  imprest  fund,  out  of  which  all  petty  disbursements  should  be  made.  It  is  ad- 
visable to  take  receipts  for  such  sums  paid  and  as  the  fund  becomes  depleted,  replenish  it 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


by  drawing  a  check  on  the  bank  for  the  amount  of  the  receipts  on  hand.  Naturally,  this 
check  should  bring  the  amount  of  the  fund  back  to  the  original  amount,  while  the  ledger 
account  itself  is  not  affected.  Debit  this  account  with  the  amount  originally  or  subse- 
quently applied  for  this  purpose  and  credit  same  with  any  reduction  in  the  fund  which 
becomes  advisable. 

Account  No.  34 — Postage,  Car-Fare  and  Revenue  Stamps;  This  account  should  be  debited 
with  all  postage  and  revenue  stamps  at  time  they  are  purchased.  The  account  should  be 
credited  by  journal  entry  once  or  twice  a  month  as  the  stamps  are  used.  Any  street-car, 
interurban,  or  railroad  tickets  can  also  conveniently  be  carried  in  this  account  in  the  same 
way. 

Account  No.  36 — Accounts  Receivable:  This  is  a  so-called  controlling  account  and  represents 
the  sum  total  of  all  individual  accounts  receivable,  which  individual  accounts  need  to  be 
carried  on  separate  ledger  pages  under  index  provided.  The  monthly  footing  only  of  the 
first  column  in  the  Sales  Register  section,  should  be  debited  to  this  account;  while  the  indi- 
vidual items  in  this  same  column  should  be  debited  to  the  individual  customers'  accounts 
carried.  Similarly,  this  account  should  be  credited  with  the  monthly  total  of  the  first  col- 
umn of  the  Cash  Received  section ;  while  the  individual  credits  in  this  column  are  posted  to 
the  respective  individual  customers'  accounts. 

Account  No.  37— Notes  Receivable:  This  account  should  be  debited  by  journal  entry  with  all 
notes  received  from  customers  in  settlement  of  their  accounts,  at  which  time  Account  No.  36 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

(Accounts  Receivable)  and  the  individual  customers  making  such  settlements,  should  be 
credited.  This  account  should  be  credited  with  the  amount  of  notes  when,  and  as,  paid. 
If  any  considerable  number  of  notes  are  acquired,  it  would  be  advisable  to  keep  a  separate 
note  register  which  can  be  secured  from  stock  at  any  stationery  store. 

Account  No.  38 — Trade  Acceptances  Receivable:  This  account  should  be  kept  similar  to  the 
method  prescribed  under  Account  No.  37  (Notes  Receivable). 

Account  No.  39 — Prospective  Commissions  Receivable:  This  account  is  provided  for  record- 
ing any  amounts  that  may  be  due  the  Dealer  for  shipments  made  by  the  Company  or  the  Dis- 
tributor direct  to  a  customer,  where  the  Dealer  is  not  expected  to  look  after  the  collection. 
This  account  should  be  debited  by  journal  entry  at  the  time  notice  of  shipment  is  received,  at 
which  time  Account  No.  201,  202,  203,  204,  205,  206,  or  207  would  be  credited,  according 
to  the  circumstances.  This  account  should  be  credited  at  the  time  the  commission  is  actu- 
ually  paid  to  the  Dealer. 

Account  No.  40 — Credit  Balance  with  Distributor:  This  account  should  be  debited  with  any 
required  balance  which  the  Dealer  is  asked  to  carry  as  a  standing  credit  with  the  Distrib- 
utor, as  established.  The  account  should  be  credited  with  the  amount  by  which  the  balance 
may  be  reduced  or  eliminated. 

Account  No.  41 — Advanced  Expense  Accounts :  This  account  should  be  debited  when  expense 
money  is  advanced  to  salesmen,  servicemen,  or  others  when  a  later  accounting  for  such  sums 

Page  33 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

is  expected.  It  should  be  credited  with  the  amount  of  funds  actually  accounted  for,  at 
which  time  some  individual  or  expense  account  would  be  debited.  This  account  may  be 
treated  as  a  controlling  account  and  individual  accounts  maintained  thereunder,  if  desired. 

Account  No.  42 — Personal  Accounts:  This  account  can  also  conveniently  be  treated  as  a  con- 
trolling account,  if  desired,  and  salesmen's  individual  commission  accounts,  or  other  per- 
sonal accounts,  kept  thereunder. 

Account  No.  43 — Debit  Balances  on  Creditors'  Accounts:  It  sometimes  happens  that  individ- 
ual creditors'  accounts  will  show  debit  balances,  due  to  overpayments,  return  of  goods  after 
payment,  or  other  similar  causes.  In  such  cases,  it  is  preferable  to  show  under  this  heading 
the  sum  of  all  debit  balances  on  such  accounts.  Usually  no  ledger  account  by  this  name  is 
kept,  but  such  balances  are  shown  when  the  balance  sheet  is  prepared,  the  amount  being- 
taken  direct  from  the  trial  balance  of  individual  accounts  in  the  Accounts  Payable  ledger. 

Account  No.  46 — Reserve  for  Uncollectable  Receivables  (Credit)  :  When  credit  is  extended 
to  miscellaneous  customers,  it  sometimes  happens  that  accounts  cannot  be  collected  and 
losses  result.  If  any  considerable  amount  of  credit  is  thus  extended,  it  is  a  policy  of  good 
bookkeeping  to  provide  a  so-called  reserve  for  losses  on  uncollectable  accounts  and  this 
account  is  intended  for  this  purpose.  This  account  should  be  credited  with  whatever 
monthly,  quarterly,  or  yearly  sum  may  be  deemed  advisable  and  in  proportion  to  the  ac- 
counts, notes   and  trade  acceptances  receivable  outstanding,  at  which  time  Account  No. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


512  (Uncollectable  Accounts)  should  be  debited.    This  is  a  feature  of  conservative  book- 
keeping which  is  looked  upon  with  favor  by  bankers  and  other  credit  men. 

Account  No.  51 — Inventory — Plants  and  Batteries, 

Account  No.  52 — Inventory — Pumps, 

Account  No.  53 — Inventory — Accessories, 

Account  No.  54 — Inventory — Wiring  Material, 

Account  No.  55 — Inventory — Fixtures, 

Account  No.  56 — Inventory — Service  Parts, 

Account  No.  57— Miscellaneous  Inventory;  These  accounts  are  all  self-explanatory,  with  the 
possible  exception  of  Account  No.  57  (Miscellaneous  Inventory).  This  is  intended  to  pro- 
vide for  inventory  items  of  a  miscellaneous  character,  for  which  no  specific  classification 
can  reasonably  be  assigned ;  for  example,  any  goods  for  resale  acquired  in  any  manner  and 
not  strictly  belonging  to  our  line  of  business,  should  be  carried  in  Account  No.  57. 

All  these  accounts  should  be  debited  with  respective  goods  purchased,  at  which  time  the 
creditors  or  sources  of  supply  are  credited  with  the  same  amounts  through  the  use  of  the 
Purchase  Register.    These  accounts  should  be  respectively  credited  at  cost  prices  when  such 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

goods  are  sold,  the  credit  entry  arising  through  the  cost  price  columns  in  the  Sales  Reg- 
ister. The  balances  should  always  be  debits  and  would  represent  the  cost  value  of  such 
goods  as  may  be  on  hand.  Freight,  express,  or  parcels  post  paid  on  account  of  the  inbound 
shipment  of  such  goods  to  the  Dealer,  should  properly  be  debited  to  these  accounts  respec- 
tively, and  due  allowance  made  therefor  in  costing  these  goods  at  time  they  are  sold  or 
inventoried. 

Book  inventories  should  be  verified  and  if  necessary,  reconciled  periodically,  at  least 
every  three  months — preferably  at  the  end  of  each  month  where  the  volume  of  goods  is 
not  too  great  to  make  this  impracticable.  A  complete  inventory  should  always  be  taken 
and  incorporated  in  the  records  at  the  end  of  each  fiscal  year. 

Account  No.  59 — Goods  in  Transit:  This  account  is  used  as  a  temporary  repository  for  the 
debiting  of  goods  purchased,  when  it  becomes  necessary  or  advisable,  on  account  of  cash 
discount  or  otherwise,  to  pay  for  them  before  they  are  actually  received.  This  account 
should  be  debited  when  such  goods  are  paid  for  in  this  way  and  should  be  credited  by 
journal  entry  when  the  goods  are  received,  at  which  time  the  proper  inventory  account 
should  be  debited. 

Account  No.  60 — Consignment  Inventory  (Belonging  to  Others) :  This  account  is  the  Asset 
Contra  (or  opposite)  of  Liability  Account  No.  118  (Consigned  Goods  Belonging  to  Others) 
under  which  account  an  explanation  of  its  use  is  made. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  66 — Consigned  Goods  (In  Hands  of  Others) :  This  account  may  be  treated  as  a 
controlling  account  if  desired  and  is  intended  to  make  record  of  any  goods  shipped  out  on 
trial,  on  approval,  or  on  a  loaned  basis.  Debit  this  account  with  the  cost  value  only  when 
such  goods  are  shipped  out,  and  credit  this  account  when  goods  are  returned.  In  the  event 
that  such  consigned  goods  are  turned  into  a  regular  sale,  an  entry  should  be  made  debiting 
proper  inventory  account  and  crediting  Account  No.  66,  after  which  proper  sales  invoice 
and  record  should  be  made  in  the  regular  way. 

Account  No.  71 — Investments:  This  account  is  intended  to  provide  for  investments — Liberty 
Bonds,  War  Saving  Stamps,  or  other  securities  which  it  may  become  advisable  to  acquire. 
Debit  this  account  with  the  cost  of  such  investments  and  credit  same  with  the  cost  value 
when  sold.  Any  interest  or  dividends  received,  or  any  value  realized  over  cost  when  sold, 
should  be  credited  to  Account  No.  304  (Income  from  Investments). 

Account  No.  79 — Total  Current  Assets:  No  ledger  account  by  this  name  is  carried,  but  it  ap- 
pears as  such  in  the  balance  sheet  and  represents  the  sum  total  of  all  Current  Assets. 

PREPAID  ASSETS 

Account  No.  81 — Interest  Prepaid:  This  account  should  be  debited  with  interest  on  loans  paid 
in  advance  and  is  credited  pro-rata  as  the  time  expires  over  which  the  loan  extends;  at 
which  time  Account  No.  509  (Interest,  Discount  and  Exchange)  is  credited. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  82 — Insurance  Prepaid:  This  account  provides  for  all  kinds  of  insurance  pre- 
miums paid  in  advance  and  should  be  treated  in  a  manner  similar  to  that  described  under 
Interest  Prepaid.  The  debit  for  pro-rata  insurance,  as  it  accrues,  should  be  made  against 
Account  No.  507  (Insurance). 

Account  No.  89 — Total  Prepaid  Assets:  No  ledger  account  by  this  name  is  carried,  but  it  ap- 
pears as  such  in  the  balance  sheet  and  represents  the  sum  total  of  all  Prepaid  Assets. 

Account  No.  99 — Total  Assets. 

FIXED  LIABILITIES 

Account  No.  101 — Mortgages :  This  account  should  be  credited  with  any  mortgages  that  may 
be  carried  on  any  Fixed  Assets.  It  should  be  debited  with  any  principal  payments  made  on 
account  of  such  mortgages.  Interest  on  a  mortgage  should,  of  course,  be  treated  as  an  ex- 
pense account  and  charged  to  Account  509  (Interest,  Discount  and  Exchange). 

Account  No.  102 — Long  Term  Notes:  This  account  should  be  treated  similar  to  Mortgages 
Account,  No.  101,  described  above.  Long  Term  Notes  classify  as  such  only  when  given  in 
settlement  for  Fixed  Assets. 

Account  No.  109 — Total  Fixed  Liabilities:  No  ledger  account  by  this  name  is  carried,  but  it 
appears  as  such  in  the  balance  sheet  and  represents  the  sum  total  of  all  Fixed  Liabilities. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


CURRENT  LIABILITIES 

Account  No.  Ill — Accounts  Payable:  This  is  a  controlling  account  and  is  established  by 
crediting  it  at  the  end  of  each  month  with  the  sum  total  only  of  the  first  column  in  the 
Purchase  Register,  while  the  individual  items  recorded  in  that  column  are  credited  to  the 
individual  creditors'  accounts  carried  in  the  Accounts  Payable  Ledger  section.  This  ac- 
count should  be  debited  at  the  end  of  each  month  with  the  total  of  the  first  column  of  the 
Cash  Paid  section,  while  the  individual  creditors'  accounts  recorded  in  the  same  column 
are,  of  course,  debited  with  the  respective  amounts  of  such  payments. 

Account  No.  112— Notes  Payable:  This  account  should  be  credited  with  all  notes  given  by  the 
Dealer  to  banks,  Distributor,  or  other  creditors;  and  when  a  considerable  number  of  notes 
are  given,  it  will  be  advisable  to  secure  a  Notes  Payable  Register  from  stock  at  any  station- 
ery store  and  keep  a  detailed  record  of  such  notes.  This  account  should  be  credited  with 
the  principal  amount  of  whatever  notes  are  given  at  the  time  they  are  given ;  and  whatever 
account  is  affected  by  the  giving  of  notes,  should  be,  at  the  same  time,  debited ;  that  is,  if 
money  is  borrowed  at  the  bank  and  a  note  is  given  therefor,  Bank  Account  No.  31  or  32 
should  be  charged.  If  the  note  is  given  in  settlement  of  goods  purchased  and  previous 
record  has  been  made  of  such  goods  under  Accounts  Payable,  then  the  account  of  the  cred- 
itor to  whom  the  note  was  given  would  be  debited  at  the  time  the  note  was  given  him.  Notes 
Payable  account  should  be  debited  at  the  time  such  notes  are  paid.  Interest  paid  at  matur- 
ity or  discount  paid  in  advance,  should  be  treated  as  an  expense  and  charged  to  Account 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

No.  509  (Interest,  Discount  and  Exchange),  or  Account  No.  81  (Interest  Prepaid),  as  the 
case  may  be. 

Account  No.  113 — Trade  Acceptances  Payable ;  This  account  should  be  handled  similar  to 
method  described  under  Account  112  (Notes  Payable). 

Account  No.  114 — Prospective  Commissions  Payable:  When  a  salesman  works  on  a  commis- 
sion basis,  this  account  should  be  credited,  at  the  time  shipment  is  made  of  goods  sold,  with 
the  commission  due  him  on  the  transaction  and  should  be  debited  with  the  amount  of  com- 
mission when  paid.  This  account  can  be  treated,  if  desired,  as  a  controlling  account  and 
individual  accounts  kept  thereunder.  This  will  be  found  advantageous  when  more  than 
one  salesman  is  employed  on  a  commission  basis. 

Account  No.  115 — Credit  Balances  on  Debtors'  Accounts:  This  account  will  not  ordinarily 
appear  as  a  ledger  account,  but  is  provided  for  use  in  the  balance  sheet  so  as  to  record  the 
sum  total  of  credit  balances  that  may  appear  on  the  individual  receivable  accounts.  Credits 
on  such  accounts  usually  arise  from  advance  payments  at  time  of  signing  the  order,  over- 
payment, or  return  for  credit  of  a  purchase  which  had  been  previously  debited.  It  is  de- 
sirable, in  such  instances,  to  record  this  total  on  the  balance  sheet  under  this  heading. 

Account  No.  118 — Consigned  Goods  (Belonging  to  Others)  :  This  account  should  be  credited 
with  the  cost  value  of  any  goods  belonging  to  others,  received  by  a  Dealer  on  a  trial,  ap- 
proval, or  loaned  basis,  at  which  time  Consignment  Inventory  Account  (No.  60)  would  be 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


debited.  Above  account  should  be  debited  when  such  goods  are  returned  to  their  owner, 
or  at  such  time  as  a  payable  invoice  for  them  is  accepted,  indicating  that  they  have  been 
definitely  purchased,  whereupon  Consignment  Inventory  Account  (No.  60)  should,  of 
course,  be  credited. 

Lamps  consigned  to  a  Dealer  by  his  Distributor  should  be  handled  in  this  account  when 
received.  The  cost  value  of  the  consigned  lamps  should  be  credited  to  this  account,  while 
Account  No.  60  (Consignment  Inventory)  should  at  the  same  time  be  debited.  When  con- 
signed lamps  are  sold  by  a  Dealer,  Account  No.  118  should  be  debited  with  their  cost 
value  and  Account  No.  60  should  be  credited,  in  order  to  reverse  the  entry  made  at  the 
time  the  goods  were  originally  received.  Thereafter,  the  transaction  would  be  handled  the 
same  as  any  other  goods  bought  and  sold;  that  is,  entries  should  first  be  made  debiting  the 
value  of  the  lamps  actually  sold,  to  the  proper  inventory  account  and  crediting  the  source 
of  supply  in  Accounts  Payable  Account,  No.  111.  (The  entry  just  spoken  of  will  likely 
need  to  be  made  from  memorandum  slip,  as  no  separate  payable  invoice  for  the  exact  num- 
ber of  lamps  sold  would  probably  be  in  hand.)  The  sale  of  the  lamps  to  the  Dealer's  cus- 
tomer should,  of  course,  be  handled  the  same  as  any  other  sale ;  that  is,  proper  customer's 
invoice  should  be  rendered  and  consequent  bookkeeping  entries  made. 

The  above  routine,  although  somewhat  complicated,  is  nevertheless  the  correct  principle 
to  follow.  Doubtless  some  Dealers  will  prefer  to  conduct  their  lamp  transactions  during  the 
month  on  a  strictly  memorandum  basis  and  consolidate  the  necessary  bookkeeping  entries 
at  the  end  of  the  month. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Account  No.  121 — Accrued  Salaries  and  Wages ;  This  account  should  be  credited  with  the 
amount  of  all  salaries  and  wages  which  have  accrued  and  have  not  been  paid  as  of  the  end 
of  the  month  or  other  accounting  period.  The  same  account  should  be  debited  when  such 
salaries  and  wages  are  actually  paid. 

Account  No.   122 — Accrued  Taxes;     (See  next  account.) 

Account  No.  123 — Accrued  Interest:  These  accounts  should  be  handled  in  a  manner  similar 
to  that  described  under  Account  No.  121  (Accrued  Salaries  and  Wages). 

Account  No.  129— Total  Current  Liabilities:  No  ledger  account  by  this  name  is  carried,  but 
it  appears  as  such  in  the  balance  sheet  and  represents  the  sum  total  of  all  Current  Liabil- 
ities. 

NET  WORTH 

Account  No.  181 — Capital  or  Investment — Original:  This  account  should  be  credited  with  the 
amount  of  money  with  which  the  business  is  originally  started,  at  which  time  Bank  Account 
No.  31  or  32  is  charged. 

Account  No.  182— Capital  or  Investment— Additions :  This  account  should  be  credited  with 
later  sums  devoted  to  the  business,  either  in  the  form  of  additional  cash  employed,  or 
profits  definitely  diverted  from  Surplus  to  the  Capital  Account. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Account  No.  186 — Profit  and  Loss;  This  account  is  ordinarily  used  on  the  ledger  only  at  the 
end  of  a  fiscal  period,  at  which  time  all  income  and  expense  accounts  are  closed  into  this 
account  by  journal  entries — the  income  accounts  being  credited  to  this  account,  at  which 
time  such  income  accounts  are  debited,  in  o-der  to  close  them  on  the  ledger;  and  the  expense 
accounts  being  debited  to  this  account,  at  which  time  such  expense  accounts  are  credited  in 
order  to  close  them  on  the  ledger.  A  credit  balance  in  this  account  reveals  a  profit,  while 
a  debit  balance  indicates  a  loss,  on  operations.  The  final  balance  in  this  account  at  the 
end  of  the  year,  whether  a  credit  or  a  debit,  should  properly  be  closed  into  Account  187 
(Surplus).  This  account  always  appears  in  the  Profit  and  Loss  and  Balance  Sheet  state- 
ments as  same  are  rendered  at  the  end  of  each  month  or  other  period. 

Account  No.  187— Surplus:  This  account,  as  explained  under  Account  No.  186  (Profit  and 
Loss),  is  credited  at  the  end  of  a  fiscal  period,  with  the  net  amount  remaining  in  the  Profit 
and  Loss  Account  (No.  186)  and  it  is  debited  with  permanent  withdrawals  of  profits  or 
dividends  from  the  business;  also,  with  any  deficit  that  may  accrue  during  a  fiscal  period. 
Surplus  account  is  intended  to  represent  undistributed  earnings  which  have  accumulated 
during  previous  fiscal  periods  through  Profit  and  Loss  Account. 

Account  No.  189— Total  Net  Worth:  No  ledger  account  by  this  name  is  carried,  but  it  appears 
as  such  in  the  balance  sheet  and  represents  the  sum  total  of  all  Capital,  Profits  and  Surplus. 

Account  No.   199 — Total  Liabilities  and  Net  Worth. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

TRADING  ACCOUNTS 

Account  No.  201 — Sales  of  Plants  and  Batteries, 

Account  No.  202 — Sales  of  Pumps, 

Account  No.  203 — Sales  of  Accessories, 

Account  No.  204 — Sales  of  Wiring  Material, 

Account  No.  205 — Sales  of  Fixtures, 

Account  No.  206 — Sales  of  Service  Parts, 

Account  No.  207 — Miscellaneous  Sales:  Sales  billed  at  time  of  shipment  or  delivery,  not  sales 
booked  at  time  orders  are  received,  should  be  recorded  under  the  above  respective  ac- 
counts— the  record  being  taken  at  the  end  of  each  month  or  other  fiscal  period,  from  the 
totals  of  the  Sales  Register.  These  accounts  are  always  credits,  although  credit  memo- 
randa issued  to  customers  at  list  prices  for  the  return  to  stock  of  any  plants,  pumps,  acces- 
sories, or  other  sold  material  should  be  entered  as  debits  to  the  above-mentioned  accounts. 

Account  No.  209 — Gross  Sales  (Billings);  No  ledger  account  by  this  name  is  carried,  but  it 
appears  as  an  item  in  the  Profit  and  Loss  statement. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Account  No.  211 — Cost  of  Plants  and  Batteries  Sold, 

Account  No.  212 — Cost  of  Pumps  Sold, 

Account  No.  213 — Cost  of  Accessories  Sold, 

Account  No.  214 — Cost  of  Wiring  Material  Sold, 

Account  No.  215 — Cost  of  Fixtures  Sold, 

Account  No.  216 — Cost  of  Service  Parts  Sold, 

Account  No.  217 — Cost  of  Miscellaneous  Sales:  These  accounts  are  debited  at  the  end  of 
each  month  with  the  cost  of  respective  goods  sold,  including  due  allowance  for  inbound 
freight  which  the  Dealer  was  obliged  to  pay  at  the  time  the  goods  were  purchased.  The 
totals  of  the  cost  price  columns  in  the  Sales  Register  become  the  debits  to  these  accounts 
— the  cost  of  such  goods  having  previously  been  shown  on  the  sales  invoices  and  entered  in 
the  Sales  Register.  The  cost  value  of  any  goods  returned  from  customers  to  the  Dealer 
should  be  entered  as  a  credit  to  these  accounts — the  entry  being  made  from  the  Sales 
Register  after  such  credit  memoranda,  properly  costed,  are  entered  following  the  invoices, 
which  accumulate  during  the  month. 

Account  No.  219 — Total  Cost  of  Goods  Sold:  This  account  is  not  a  ledger  account,  but  a 
Profit  and  Loss  account  representing  the  total  of  the  cost  of  goods  sold. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Account  No.  221 — Gross  Profit  on  Plants  and  Batteries, 

Account  No.  222 — Gross  Profit  on  Pumps, 

Account  No.  223 — Gross  Profit  on  Accessories, 

Account  No.  224 — Gross  Profit  on  Wiring  Material, 

Account  No.  225 — Gross  Profit  on  Fixtures, 

Account  No.  226 — Gross  Profit  on  Service  Parts, 

Account  No.  227 — Gross  Profits  on  Miscellaneous  Sales, 

Account  No.  301 — Gross  Profits  on  Sales:  These  accounts  are  not  ledger  accounts,  but  show 
on  the  Profit  and  Loss  Statement  and  represent  the  difference  between  sales  and  cost  of  same 
goods  sold,  or,  in  other  words,  the  difference  between  sales  billed  at  selling  prices  and  goods 
sold  at  cost  prices — the  difference  being  gross  profits  on  such  goods  sold. 

INCOME  ACCOUNTS 

Account  No.  301 — Gross  Profits  on  Sales:  This  account  has  previously  been  described  under 
the  heading,  "Trading  Accounts,"  and  is  not  a  ledger  account. 

Page  46 


BOOKKEEPING      SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Account  No.  302— Interest  on  Receivables:  This  account  is  a  credit— the  entry  originating 
from  the  second  column  in  the  Cash  Received  section,  or  from  the  journal,  if  a  journal 
entry  has  been  made,  for  the  amount  of  interest  which  has  accrued  on  receivables  during 
the  month  or  period  for  which  the  entry  is  made.  Any  overcharge  of  interest,  when  re- 
funded, would  be  debited  to  this  account. 

Account  No.  303— Interest  on  Bank  Deposits:  This  account  is  a  credit— the  entry  originating 
from  the  second  column  of  the  Cash  Received  book.  It  is  usually  advisable  to  hold  the 
cash  received  book  open  for  a  day  or  two  after  the  close  of  the  month,  so  as  to  permit  entries 
of  such  items  as  interest  on  bank  deposits,  if  interest  credits  are  allowed,  which  usually  can- 
not be  learned  until  after  the  expiration  of  the  month. 

Account  No.  304 — Income  from  Investments:  This  account  is  a  credit  and  represents  the 
interest  or  dividends  received  from  such  investments  as  Liberty  Bonds  or  stocks  owned. 
The  entry  originates  from  the  second  column  of  the  cash  received  section  and  is  always 
a  credit. 

Account  No.  305— Cash  Discount  on  Purchases:  This  account  represents  cash  discount  on  all 
goods  purchased  and  the  entry  originates  from  the  third  column  of  the  Cash  Paid  section — 
the  amount  being  the  sum  total  of  that  column  for  the  period.  Any  cash  discount  on  pur- 
chases refunded  should  be  debited  to  this  account.  In  handling  this  account,  CASH  DIS- 
COUTS  and  TRADE  DISCOUNTS  should  never  be  confused.  Cash  discounts  should  be 
treated  as  an  income  account  as  herein  described,  while  trade  discounts  should  be  used  to 
reduce  the  cost  of  the  goods  purchased. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Account  No.  306— Miscellaneous  Income:  This  account  provides  for  recording  miscellaneous 

income  receipts,  such  as  the  sale  of  scrap  material  and  the  recovery  of  unclaimed  wages 

previously  charged. 
Account  No.  309— Gross  Profits  (Total  Earnings) :    This  is  not  a  ledger  account,  but  is  a  Profit 

and  Loss  Account,  representing  the  sum  total  of  all  income  accounts.    Gross  profits  are 

sometimes  spoken  of  as  Total  Earnings  or  Gross  Earnings. 

SELLING  EXPENSES 
Accounts  Nos.  401  to  429,  inclusive:  These  accounts  provide  for  the  reasonable  segregation 
and  classification  of  the  more  important  selling  expense  accounts  which  help  to  show  the 
details  of  this  branch  of  the  business.  These  accounts  are  always  debits  and  as  such  they 
can  be  treated  as  subsidiary  ledger  accounts  rather  than  main  ledger  accounts,  if  desired. 
In  other  words,  as  far  as  these  expenses  are  concerned,  Account  No.  499  (Total  Selling 
Expenses)  only  needs  to  be  used  in  the  Profit  and  Loss  statement  in  arriving  at  the  net 
result  of  any  period's  operations.  The  detail  of  the  total  selling  expenses  will  be  provided 
by  the  above-mentioned  accounts  and  the  sum  total,  of  course,  should  agree  with  the  con- 
trol account,  No.  499  (Selling  Expenses) . 

GENERAL  EXPENSES 
Accounts  Nos.  501  to  519,  inclusive:    These  accounts  provide  for  the  recording  of  the  general 
or  administrative  expenses  of  the  business  and  are  always  debits.    These  accounts  likewise 
may  be  treated  as  simply  a  classification   of  the   control   account,   No.    599    (General 

Expenses). 

Page  48 


CHAPTER  VII 

THE  BOOKKEEPING  SET  PROPER 

This  bookkeeping  set  proper  has  been  prepared  in  eight  different  sections,  all  conveniently 
contained  in  the  same  loose-leaf  binder  (Tatum  Stock  No.  8158).    These  are  as  follows: 

Section  1 — Cash  Received. 

Section  2 — Cash  Paid. 

Section  3 — Journal. 

Section  4 — Purchase  Register. 

Section  5 — Sales  Register. 

Section  6 — General  Ledger. 

Section  7 — Accounts  Receivable  Ledger. 

Section  8 — Accounts  Payable  Ledger. 

It  will  at  once  be  seen  that  these  sections  are  all  fundamental  divisions  of  any  standard 
bookkeeping  system,  the  principal  difference  being  that  instead  of  having  eight  separate  bound 
or  loose-leaf  books,  the  forms  have  been  accumulated  under  proper  index  tabs  in  one  loose- 
leaf  binder.  It  is  believed  that  considerable  economy  in  cost  and  convenience  in  handling  are 
thus  secured,  while  at  the  same  time  it  becomes  possible  to  provide  additional  binders  for  any 
one  or  more  sections  which  in  time  become  too  bulky  for  convenient  handling.  The  size  of 
the  sheets,  punchings,  and  the  binder  itself,  are  standard  construction,  and  no  difficulty  should 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

be  experienced  in  securing  transfers  or  other  desired  accessories  from  almost  any  stationery 
store. 

It  will  also  readily  be  observed  that  some  of  the  forms  appearing  under  these  sections  have 
been  devised  to  meet  the  specific  requirements  of  a  Delco-Light  Dealer's  business,  while  others 
are  purely  standard.    The  following  is  a  general  description  of  sections: 

Section  1 — Cash  Received:    This  form  (DLD-1,  reproduced  on  page  98)  provides  the  follow- 
ing headings : 

Date;  Customers' Names;  Invoice  Numbers  or  Items; 

Account  Number ;  Posted  Column ;  Accounts  Receivable 

Credit;  Other  Accounts     Credit;  Discount,  Exchange 

and  Collection  Debit ;  Bank  Account  Debit : 
all  of  which  we  believe  are  self-explanatory.  Entries  on  this  form  originate  from  the  col- 
lection copy  of  the  customer's  invoice  form  later  described,  or  other-wise  from  memoranda 
whenever  cash  remittances  from  any  source  are  received.  All  cash  credit  accounts,  other 
than  Accounts  Receivable,  should  be  entered  in  the  second  column  of  this  form  and  the 
account  number,  as  per  Card  of  Accounts  previously  described,  should  be  entered  on  the 
same  line  in  the  Account  Number  column.  Every  entry  is  self-balancing,  in  that  debit 
entries  are  made  for  every  credit  account.  All  receipts  should  be  deposited  in  the  bank  on 
the  same  day  received;  and  before  deposits  are  made,  they  should  first  be  verified  and 
made  to  agree  with  the  amounts  recorded  in  the  Bank  Account  debit  column.  Each  month's 
transactions  should  be  separately  recorded  and  totals  established  for  all  accounts  entered 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

during  each  month.  Individual  credit  items  in  the  first  and  second  columns  should  be  posted 
to  individual  accounts  in  either  the  Receivable  or  General  Ledger  and  the  monthly  totals 
only  of  the  first,  third,  and  fourth  columns  should  be  posted  to  their  respective  accounts  in 
the  General  Ledger  direct ;  that  is,  no  necessity  exists  for  journalizing  any  entries  in  this 
form. 

Section  2 — Cash  Paid:    This  form  (DLD-2,  reproduced  on  page  99)  provides  the  following 
headings : 

Date ;  Payees'  Names ;  Check  Numbers  or  Items ;  Account 
Number;  Posted  Column;  Accounts  Payable  Debit; 
Other  Accounts  Debit ;  Purchase  Discount  Credit ;  Bank 
Account  Credit. 

We  believe  these  accounts  are  also  self-explanatory.  Entries  on  this  form  originate  from 
the  stubs  of  the  bank  check-book  on  which  should  be  recorded  sufficient  details  of  the 
disbursement  to  make  an  intelligent  and  complete  entry.  All  debit  accounts  other  than 
Accounts  Payable  should  be  entered  in  the  second  column  of  this  form ;  and  the  account 
number  affected,  as  determined  from  card  of  accounts,  should  be  indicated  on  the  same 
line  in  the  Account  Number  column.  All  entries  on  this  form  are  self-balancing.  Individ- 
ual Accounts  Payable  debits  and  all  Other  Account  debits  should,  of  course,  be  individu- 
ally posted  to  proper  ledger  accounts.  Each  month's  entries  should  be  totaled  at  the  end 
of  the  period  and  the  totals  only  of  the  first,  third  and  fourth  columns  should  be  posted 
direct  to  the  respective  General  Ledger  accounts. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Section  3— Journal :    This  form  (DLD-3,  reproduced  on  page  100)  is  headed  with  the  following 
column  captions: 

Date;  Accounts;  Account  Numbers;  Posted  Column; 
Debits;  Credits. 

The  arrangement  of  this  form  is  quite  conventional  and  provides  facilities  for  the  making 
of  all  necessary  original  entries  which  are  not  otherwise  provided  for  by  the  other  sections 
of  this  book.  It  is  customary  to  enter  each  debit  item  on  one  line  and  the  credit  item  of  the 
same  amount  on  the  next  line.  The  numbers  of  all  accounts  entered  in  the  journal  as  per 
Card  of  Accounts  already  described  also  should  be  shown,  in  order  to  facilitate  the  post- 
ing of  the  individual  items  to  the  ledger.  The  debit  and  credit  columns  should  be  respec- 
tively totaled  at  the  end  of  each  month  to  prove  the  accuracy  in  amount  of  all  entries.  To- 
tals, of  course,  are  not  posted. 

Section  4— Purchase  Register;    This  form  (DLD-4,  reproduced  on  page  101)  is  headed  with  the 
following  designations: 

Date;  Creditors'  Names;  Posted  Column  for  Credits; 
Posted  Column  for  Debits ;  Account  Numbers ;  Accounts 
Payable  Credit;  Fixed  Assets  Debit;  Current  Assets 
Debit;  Prepaid  Assets  Debit;  Selling  Expenses  Debit; 
General  Expenses  Debit. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Entries  herein  originate  from  creditors'  invoices  received  from  time  to  time  covering  goods 
purchased  by  the  Dealer,  expenses  incurred,  or  otherwise.  It  is  desirable,  in  this  connec- 
tion, to  have  invoices  presented  promptly  for  all  values  delivered,  in  order  that  a  com- 
plete and  satisfactory  record  of  such  accounts  may  be  made.  It  is  especially  important 
that  at  the  end  of  the  month  all  goods  received  and  expenses  incurred  are  properly 
recorded  in  the  Purchase  Register  from  invoices  rendered,  in  order  that  a  complete 
record  of  the  month's  transations  may  be  insured.  Omissions  of  any  original  entries  in 
this  or  any  other  section,  constitute  errors  which  should  be  conscientiously  avoided. 
Any  credit  memoranda  received  from  creditors  for  the  return  of  goods  or  otherwise, 
should  be  separately  recorded  on  this  form,  either  at  the  close  of  the  month  after  all 
invoices  have  been  entered,  or  on  a  page  or  set  of  pages  especially  set  aside  for  that 
purpose.  It  is  suggested  that  such  entries  be  made  in  red  ink,  which  will  immediately  sug- 
gest to  the  bookkeeper  the  necessity  of  reversing  entries  for  such  credits  at  the  time  they 
are  posted  in  the  ledger;  that  is,  credit  memoranda  from  a  creditor  are  debits  to  his  account 
and  credits  to  whatever  distribution  accounts  are  affected,  while  invoices  are  always  credits 
to  the  creditor  and  debits  to  the  distribution  accounts.  Individual  postings  to  proper  ledger 
accounts  of  all  credit  and  debit  items  entered  on  this  form  are  necessary  and  the  columns, 
of  course,  should  be  footed  at  the  end  of  each  month  to  determine  that  the  sum  total  of  the 
debit  columns  agrees  with  the  total  of  the  credit  column.  The  total  of  the  Accounts  Pay- 
able column  only  should,  of  course,  be  posted  at  the  end  of  each  month  to  the  same  account 
in  the  General  Ledger. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Section  5— Sales  Register:  The  Sales  Register  (Form  DLD-5,  reproduced  on  page  102)  is  the 
only  double-page  form  provided  in  the  set,  and  the  main  headings  of  these  columns  are 
as  follows : 

Date ;  Customers'  Names ;  Invoice  Numbers ;  Posted  Col- 
umn; Accounts  Receivable  Debit;  Total  Cost  Prices; 
Plants  and  Batteries;  Pumps ;  Accessories ;  Wiring  Ma- 
terial ;  Fixtures ;  Service  Parts ;  Miscellaneous  Sales. 

The  headings,  Plants,  Pumps,  Accessories,  etc.,  each  are  provided  with  sub-headings  over 
columns  entitled  Cost  Price  and  Sales  Price.  Entries  on  this  form  originate  from  the  book- 
keeper's copy  of  the  sales  invoice,  which  is  described  later.  Provision  is  made  on  the  in- 
voice form  for  distributing  both  the  sales  price  and  the  cost  price  for  each  transaction  and 
these  correspond  with  the  column  headings  on  this  form.  From  this  record,  the  total 
amount  of  sales  under  each  classification  is  conveniently  ascertained  and  the  respective 
cost  prices  are  also  readily  determined.  The  grand  total  of  all  Sales  Price  columns  must 
equal  the  total  of  the  first  column,  Accounts  Receivable  debit,  while  the  grand  total  of  all 
Cost  Price  columns  for  balancing  purposes  only  must  equal  the  total  of  Column  2, 
headed  Total  Cost  Prices.  The  only  individual  accounts  posted  from  this  register  are  those 
appearing  in  the  Accounts  Receivable  debit  column.  The  totals  of  all  Sales  Price  columns 
at  the  end  of  each  month  are  posted  direct  to  respective  accounts  in  the  General  Ledger, 
Accounts  Nos.  201  to  207  inclusive ;  likewise,  the  totals  of  all  Cost  Price  columns  at  the  end 
of  the  month  are  posted  as  debits  to  respective  accounts  Nos.  211  to  217,  inclusive,  in  the 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

General  Ledger.  The  same  totals  of  the  Cost  Price  columns  at  the  end  of  the  month  must 
also  be  posted  as  credits  to  respective  Inventory  Accounts,  Nos.  51  to  57,  inclusive,  in  the 
General  Ledger. 

Section  6 — General  Ledger:  The  general  ledger  form  (DLD-6-7-8,  reproduced  on  page  104) 
demands  no  detailed  explanation,  aside  from  the  suggestion  that  a  separate  ledger  page  be 
provided  for  each  general  ledger  account  used,  as  shown  in  the  Card  of  Accounts.  These 
should,  of  course,  be  filed  in  serial  account  number  order,  as  this  greatly  facilitates  the 
drawing  off  each  month  of  the  Trial  Balance  and  the  preparation  of  the  Balance  Sheet  and 
the  Profit  and  Loss  statement.  Debit  and  credit  entries  originate  in  manner  described  in 
detail  under  previous  sections.  The  debit  or  credit  balance  on  each  account  should  be 
determined  at  the  end  of  each  month  and  recorded  in  the  proper  column. 

Section  7 — Accounts  Receivable  Ledger:  This  so-called  Subsidiary  Ledger  provides  for  the 
individual  record  of  each  customer's  account  on  a  page  by  itself  (Form  DLD-6-7-8),  or  a 
number  of  accounts  may  be  put  on  the  same  page  if  desired.  Debit  entries  arise  principally 
from  the  first  column  of  Section  5,  Sales  Register,  while  credit  entries  almost  entirely  are 
made  from  Column  1  in  Cash  Received,  Section  1.  Control  of  all  individual  accounts 
in  this  ledger  is  maintained  by  the  Accounts  Receivable  account  in  the  General  Ledger; 
that  is,  the  net  total  of  all  individual  open  account  balances  must  always  be  the  same  as 
the  General  Ledger  account  No.  36  balance. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Section  8— Accounts  Payable  Ledger:  This,  also,  is  a  Subsidiary  Ledger,  and  provides  for  the 
individual  record  of  all  creditors'  accounts,  a  separate  page  being  provided  for  each  cred- 
itor (Form  DLD-6-7-8),  or  if  desired  a  number  of  accounts  may  be  entered  on  the  same 
page.  Credit  entries  on  this  ledger  are  posted,  principally,  from  Column  1  in  Section^, 
Purchase  Register;  while  debit  entries  largely  emanate  from  Column  1,  Section  2,  Cash  Paid. 
The  net  total  of  all  balances  on  open  accounts  in  this  ledger  should  at  all  times  agree  with 
the  balance  of  General  Ledger  Account  111,  Accounts  Payable,  which,  as  previously  de- 
scribed, is  a  controlling  account  and  should  be  handled  accordingly. 


Page  56 


CHAPTER  VIII 

THE  TRANSFER  AND  FINANCIAL  STATEMENT  BINDER 

Transfer  Binder  (Tatum  Stock  No.  9001):  In  addition  to  providing  facilities  for  holding 
sheets  under  respective  headings,  which  it  becomes  desirable  to  remove  from  the  bookkeep- 
ing set  proper,  the  Transfer  Binder  contains  ruled  and  printed  Balance  Sheet  and  Profit  and 
Loss  statements— Forms  9,  10,  11,  and  12,  illustrated  on  pages  106-113  inclusive— which  are 
good  for  one  year's  operations.  These  sheets  are  provided  for  the  purpose  of  readily  con- 
verting the  trial  balance  into  a  complete  and  satisfactory  financial  statement  in  which  all 
the  accounts  carried  in  the  General  Ledger  are  shown. 

The  method  of  recording  these  figures  on  the  forms  provided,  furnishes  all  such  infor- 
mation in  comparative  form,  which  will  be  found  highly  advantageous  and  desirable  in 
studying  the  changes  which  take  place  from  month  to  month. 

The  Profit  and  Loss  sheets  provide  for  the  recording  of  both  monthly  and  year-to-date 
figures  and  the  value  of  such  a  record  is  greatly  enhanced  by  the  continuation  of  the  same 
method  year  after  year.  In  other  words,  the  amount  of  business  for  any  month  or  any  period 
of  one  year  may  be  readily  compared  with  the  same  month  or  period's  operation  in  one  or 
more  previous  years,  providing,  of  course,  the  records  have  been  maintained. 

Trading  Account  Blanks,  so  designated,  are  really  a  part  of  the  Profit  and  Loss  state- 
ment. 

From  this  entire  record  a  monthly  financial  statement  in  condensed  form  can  very 
readily  be  drawn  and  entered  on  Form  No.  16,  entitled  "Financial  Statement,"  illustrated 
on  pages  116-119  inclusive.  page  57 


CHAPTER  IX 

CUSTOMERS*  INVOICES 

This  is  a  multiple  form  (DLD-13,  illustrated  on  page  114)  with  four  copies— the  first  one 
consisting  of  the  Customer's  Invoice;  the  second  consisting  of  the  Bookkeeper's  Copy ;  the  third, 
Shipping  Department  Copy;  and  the  fourth,  the  Collection  Copy.  The  Customer's  Copy  of  this 
form  is,  of  course,  intended  to  be  mailed  to  him  at  time  of  shipment  or  delivery  of  goods.  The 
Bookkeeper's  Copy  not  only  provides  a  duplicate  record  of  the  invoice  which  goes  to  the  cus- 
tomer, but  also  the  bookkeeping  entries  which  are  required  to  be  made  in  the  Sales  Register  and 
Journal.  The  Shipping  Department  Copy  provides  necessary  shipping  or  delivery  instruc- 
tions; and  the  Collection  Copy,  when  filed  alphabetically  in  an  unpaid  file,  affords  a  convenient 
means  of  closely  following  and  getting  in  collections  as  they  become  due.  This  same  Collection 
Copy  also  provides  facilities  for  recording  the  kind  and  amount  of  settlement  received,  as  well 
as  for  journalizing  any  commission  due  a  salesman  from  "prospective  commission"  to  "per- 
sonal account"  at  time  full  settlement  is  made.  After  settlement  has  been  received,  this  Collec- 
tion Copy  should,  of  course,  be  withdrawn  from  the  unpaid  file  and  preserved  alphabetically  in 
a  closed  file. 

This  same  form  set  may  readily  be  used  as  a  credit  memorandum  by  the  use  of  a  rubber 
stamp  with  large  letters  reading  "Credit  Memorandum."  This  impression,  of  course,  should  be 
put  on  all  four  copies  of  the  Customer's  Invoice  and  credits  should  be  issued  when  goods  orig- 
inally purchased  from  the  Dealer  are  returned,  with  his  consent,  for  credit.  The  bookkeeping 
entries  for  credit  memoranda  should  preferably  be  made  on  the  Bookkeeper's  Copy  in  red  ink, 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

so  as  to  indicate  that  these  entries,  when  recorded  on  a  separate  page  of  the  Sales  Register,  or 
immediately  following  the  month's  entries  in  the  Sales  Register  of  all  Customers'  Invoices, 
should  be  reversed  in  effect  from  the  manner  in  which  sales  invoices  are  recorded ;  that  is,  the 
value  of  goods  returned  from  a  customer  is  treated  as  a  credit  to  the  customer  and  a  debit  to 
sales,  as  the  case  may  be.  The  other  entries  with  reference  to  commissions,  cost  of  goods  sold 
and  inventory  accounts,  would  also  need  to  be  reversed  from  the  manner  in  which  invoices  are 
entered.    Office  copies  of  this  form  may  conveniently  be  filed  on  Shannon  arch  files. 


Page  59 


CHAPTER  X 

INVENTORY  CARDS 

This  card  (Form  DLD-14,  illustrated  on  page  105)  is  provided  for  keeping  an  accurate,  indi- 
vidual record  of  all  goods  carried  in  any  inventory  account.  The  heading  of  the  card  provides 
space  for  recording  the  bin  number,  the  inventory  account  number  under  which  it  is  classified, 
the  name  of  the  article,  piece  number,  from  whom  bought,  with  address,  the  unit  cost  and  the 
sales  price.    The  lower  part  of  the  card  provides  for  the  entry  of  the  following  information : 

Date, 

Invoice  Date, 
Units  Received, 
Work  Order  Number, 
Units  Delivered, 
Balance  in  Units, 
Balance  in  Cost  Value. 

These  cards,  when  properly  kept,  provide  a  so-called  perpetual  inventory  record  of  all 
goods  handled  and  the  physical  inventory  taken  periodically  as  suggested  under  explanation  of 
term  "Inventory"  (page  105)  should,  of  Course,  agree  with  the  card  record. 

It  is  not  necessary  to  extend  the  cost  value  in  the  last  column  on  each  individual  trans- 
action of  units  received  and  units  delivered,  but  the  balance  can  and  should  be  readily  extended 
at  such  time  as  an  inventory  is  taken,  or  otherwise,  as  may  be  desired. 

Page  60 


CHAPTER  XI 

WORK  ORDERS 

This  is  a  multiple  form  (DLD-15,  illustrated  on  page  115)  with  three  copies;  the  first  one 
being  the  workman's  copy,  the  second  one  the  bookkeeper's  copy  and  the  third  one  the  perma- 
nent file  copy. 

The  heading  of  this  form  provides  for  the  date ;  the  name  of  the  workman ;  the  order  num- 
ber (which  should  be  serially  assigned  from  1  up) ;  the  name  of  the  customer  and  his  address; 
the  kind  of  work  to  be  performed ;  and  an  indication  as  to  whether  the  customer  or  some  expense 
account  is  to  be  charged  with  the  cost  of  the  work  performed,  with  space  for  showing  final  dis- 
position in  either  event. 

The  lower  part  of  this  form  provides  for  the  detailed  record  of  the  cost  of  each  order  under 
three  main  classifications: 

1.  Material, 

2.  Labor, 

3.  Expense. 

The  various  classifications  of  MATERIAL  are  indicated  on  the  form  and  provision  is  made 
for  the  entering  of  all  material  taken  out,  returned  and  used,  with  the  unit  cost,  cost  value  and 
sales  price  of  such  material  used.  Under  heading  of  LABOR,  columns  are  provided  for  the 
names  of  workmen,  the  time  they  start,  the  time  they  return,  the  hours  used,  the  rate,  the  labor 
cost  and  the  sales  price. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Under  heading  EXPENSE,  provision  is  made  for  recording  such  items  as  automobile  or 
livery  hire,  railroad  or  interurban  fare,  or  hotel  expenses  attached  to  the  performance  of  the 
order. 

Provision  is  made  for  extending  the  TOTAL  MATERIAL,  LABOR  and  EXPENSE  cost  and 
for  adding  thereto  any  desired  percentage  of  profit— the  result  being  the  sales  price  at  which  the 
work  performed  should  be  properly  invoiced  to  the  customer  on  Customers'  Invoice  Form 
DLD-13. 

In  the  event  that  some  expense  account  is  to  be  charged  for  the  total  amount  of  the  work 
performed,  the  entry  should,  of  course,  be  made  at  cost.  When  the  proper  expense  account  is 
debited,  proper  inventory  accounts  should  be  credited  for  all  material  used  and  labor  and  ex- 
pense costs  should  be  credited  to  whatever  expense  accounts  have  previously  been  charged,  or 
subsequently  will  be  charged,  with  such  expenditures. 

It  is  suggested  that  if  a  Dealer  wishes  to  keep  a  very  complete  and  satisfactory  record  of 
all  outside  transactions,  a  Work  Order  should  be  made  out  for  every  kind  of  work  performed, 
including  installation  of  plants,  pumps,  wiring  material  and  fixtures,  the  delivery  of  accessories, 
and  the  rendering  of  service  of  every  kind.  The  adaptability  of  this  form  to  all  classes  of  out- 
side work  makes  its  use  quite  desirable  and  advantageous. 

The  head  workman  should  be  required  to  submit  to  the  bookkeeper  on  workman's  form,  a 
complete  record  of  all  material,  labor  and  expense  devoted  to  each  job  and  such  reports  should 
be  permanently  preserved  for  reference  by  attaching  same  to  the  bookkeeper's  copies  of  respec- 
tive customers'  invoices. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

The  bookkeeper's  copy  can  advantageously  serve  as  his  record  of  all  uncompleted  orders 
outstanding  and  the  file  copy  should  provide  a  permanent,  serially  numbered  record  of  all  orders 
issued. 

Labor  and  expense  items  on  any  customer's  invoice  prepared  from  a  work  order,  will  clas- 
sify in  the  bookkeeper's  entries  as  a  Miscellaneous  Sales  item,  while  material,  of  course,  will 
naturally  fall  under  its  respective  heading. 

If  at  the  end  of  a  month  or  other  fiscal  period  a  considerable  number  of  orders  remain  un- 
finished and  consequently  not  invoiced  to  customers,  it  may  be  desirable  to  ascertain  their  ap- 
proximate value  and  establish  a  representative  account  for  them  on  the  books  and  financial  state- 
ment for  that  period. 

In  this  event,  a  so-called  inventory  or  appraisal  of  such  unfinished  orders  may  be  taken  and 
their  cost  value  may  be  reflected  in  an  inventory  account  styled  "Unfinished  Work  Orders." 
This  account  should  be  debited  with  the  cost  value  of  such  orders  and  proper  material  and 
labor  accounts  credited. 

If  a  formal  book  entry  is  made  at  the  end  of  the  month  in  instances  of  this  kind,  it  may  be 
reversed  at  the  opening  of  the  following  month's  accounts,  thus  nullifying  the  original  entry. 

If  preferred,  a  foot-note  can  be  made  on  the  financial  statement  stating  the  approximate 
value  of  all  unfinished  work  orders  at  that  time.  It  is  customary  to  value  unfinished  orders  at 
cost  only,  and  the  inclusion  of  any  profit  in  the  calculation  is  contrary  to  good  business  practice. 

Profit  on  work  orders  should,  of  course,  be  incorporated  only  when  the  work  has  been 
completed  and  proper  invoices  are  rendered. 

Page  63 


CHAPTER  XII 

FINANCIAL  STATEMENTS 

Financial  Statements:  Forms  16A  and  16B  illustrated  on  pages  116-119  inclusive.)  The  ultimate 
object  of  all  bookkeeping  systems  centers  in  the  financial  statement  that  should  be  prepared 
at  the  end  of  each  month  or  other  fiscal  period,  for  the  reason  that  such  statements  reveal 
in  figures  a  picture  of  the  business  as  a  whole  in  connection  with  both  its  present  condition 
and  the  progress  that  has  been  accomplished  during  an  accounting  period  of  one  or  more 
months.  All  financial  statements  customarily  provide  at  least  a  Balance  Sheet  and  a  Profit 
and  Loss  Statement,  and  these  forms  have  been  supplied  in  connection  with  this  bookkeep- 
ing system.  The  Balance  Sheet  furnishes  a  detailed  listing  of  all  Assets  sub-divided  into 
their  three  classifications — Fixed,  Current  and  Prepaid — and  Liabilities  and  Net  Worth 
also  sub-divided  into  three  divisions — Fixed  Liabilities,  Current  Liabilities  and  Net  Worth. 
The  Profit  and  Loss  Statement  lists  income  from  sales,  operating  expenses,  net  profit  on 
sales,  other  income,  total  net  income  and  surplus  accounts.  The  order  and  method  observed 
in  the  Card  of  Accounts  is  now  readily  made  plain  in  contemplating  the  preparation  of  the 
financial  statement  along  the  lines  above  indicated. 

Balance  Sheet:  The  Balance  Sheet  proper  of  any  financial  statement  is  designed  to  readily 
show  in  addition  to  the  individual  value  of  each  separate  account  and  all  the  different  groups 
of  accounts  embodied  in  the  statement,  the  following  more  important  features: 

Page  64 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

1.  That  the  business  is  solvent. 

2.  The  present  net  worth  of  the  business. 

3.  The  total  resources  of  the  business. 

4.  The  amount  of  the  owner's  investment  or  capital  employed  in  the  business. 

5.  The  character  and  the  validity  of  values  indicated. 

6.  That  the  business  is  being  properly  financed. 

7.  That  the  receivables  are  being  promptly  collected. 

8.  That  proper  depreciation  reserves  are  being  established. 

9.  That  provision  has  been  made  for  debts  incurred  but  not  yet  due. 

10.  That  due  allowance  is  being  made  for  doubtful  collections. 

11.  That  borrowed  money  is  being  used  for  temporary  rather  than  permanent  needs. 

12.  In  short,  the  exact  condition  of  the  business,  considered  from  all  angles,  and  analyzed 
in  all  constituent  aspects. 

Profit  and  Loss  Statement:  The  Profit  and  Loss  Statement,  in  addition  to  showing  the  item- 
ized classification  and  amounts  of  all  income,  expense  and  profit  accounts,  is  intended  to 
readily  reveal  the  following  more  important  considerations : 

1.  The  fact  that  the  business  is  earning  a  profit  and  to  what  extent. 

2.  The  gross  volume  of  business  transacted. 

3.  The  frequency  of  turn  over. 

4.  The  ratios  borne  by  cost  of  goods  sold,  expenses,  profits,  etc.,  to  net  sales. 

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BOOKKEEPING  SYSTEM  FOR  DELCO-LIGH  T  DEALERS 


The  combined  Balance  Sheet  and  Profit  and  Loss  Statement,  when  critically  analyzed  and 
intelligently  studied  with  reference  to  a  number  of  important  ratios,  disclose  some  rather  sur- 
prising information  which  ordinarily  is  not  discovered  by  the  casual  observer  or  the  hurried 
reader  of  any  financial  statement.  The  more  important  considerations  along  this  line  are  as 
follows : 

1.  The  ratio  of  current  assets  to  current  liabilities  which,  from  a  banker's  viewpoint, 
'  should  always  be  2  to  1,  on  the  theory  that  bank  credit  is  extended  on  the  strength  of 

"current,"  "quick"  or  "liquid"  assets  as  they  are  frequently  called— the  excess  amount 
of  assets  providing  ample  margin  for  shrinkage  in  the  event  current  liabilities  need  to  be 
unexpectedly  met. 

2.  The  ratio  of  receivables  to  inventories.  Inventories  are  shown  on  the  balance  sheet  at 
cost,  while  receivables  include  profits  and  this  is  the  consideration  that  makes  a  study 
of  their  relation  to  each  other  interesting  and  valuable. 

3.  The  ratio  of  net  sales  to  receivables,  which  indicates  in  a  general  way  the  frequency  and 
promptness  of  collections. 

4.  The  ratio  of  net  sales  to  inventories,  indicating  the  "liquidity"  of  the  goods  handled. 

5.  The  ratio  of  net  worth  to  fixed  assets,  indicating  the  extent  to  which  the  owners  of  the 
business  have  supplied  working  capital.  In  other  words,  the  excess  of  the  net  worth 
over  fixed  assets  is  the  amount  of  capital  provided  for  working  requirements. 

6.  The  ratio  of  net  sales  to  net  worth,  indicating  either  a  normal,  too  rapid  or  too  slow 
turnover  of  capital. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

7.  The  ratio  of  total  fixed  and  current  liabilities  to  net  worth,  which  discloses  the  propor- 
tion of  the  total  capital  used  that  is  being  supplied  by  all  creditors  and  by  the  owners 
of  the  business. 
These  various  ratios  indicate  to  a  certain  extent  the  manner  in  which  financial  statements 
may  be  critically  tested  for  accurate  determination  of  the  method  of  conducting  the  business 
and  of  the  proper  relationships  of  all  the  various  accounts. 

It  must  be  clearly  understood  that  a  studied  investigation  of  these  various  relationships  is 
not  absolutely  essential  to  the  reading  and  practical  understanding  of  financial  statements, 
especially  when  the  business  is  in  all  respects  in  good  standing;  however,  the  methods  sug- 
gested indicate  some  of  the  inquiries  that  may  be  applied  in  the  examination  of  any  business  that 
is  not  in  satisfactory  condition  or  is  not  producing  acceptable  results.  In  other  words,  they 
suggest  the  probable  and  most  productive  procedure  in  diagnosing  business  ailments. 

It  will  readily  be  seen — and  this  is  a  very  important  consideration  which  would  become 
increasingly  valuable  as  time  goes  on — that  if  a  large  proportion  of  Delco-Light  Dealers  would 
adopt  and  consistently  maintain  a  uniform  bookkeeping  system  such  as  is  herein  presented,  a 
fund  of  statistical  information  would  thus  be  created  from  which  any  Dealer  in  the  business 
could  undoubtedly  secure  some  very  helpful  suggestions  by  comparing  his  own  operations  and 
his  balance  sheet  relations  with  either  the  average  Dealer  in  the  business  or  with  the  most  suc- 
cessful ones,  according  to  the  circumstances  and  the  purpose  he  has  in  mind. 

The  value  of  comparative  statistics  for  purposes  of  this  kind  is  almost  immeasurable. 

Page  67 


CHAPTER  XIII 

OTHER  RECORDS  REQUIRED 

A  few  other  auxiliary  records  are  required  to  make  this  system  complete,  and  some  of 
these  have  already  been  referred  to : 

1.  Bank  Pass  Book:  This  book  is  furnished  by  bank  where  the  Dealer's  account  is  kept  and 
in  it  are  recorded  the  deposits,  as  they  take  place,  of  all  money  received.  It  may  be  con- 
venient to  record  in  the  pass  book  the  names  of  the  individual  customers  from  whom  money 
is  received,  or  a  desirable  substitute  for  this  practice  is  provided  by  keeping  always  on  file 
duplicate  deposit  tickets  with  customers'  names  listed  thereon.  The  total  of  all  bank  de- 
posits recorded  in  the  pass  book  must  agree  with  the  total  of  the  Bank  Account  column 
in  the  Cash  Received  section.  Attention  is  called  to  the  importance  of  having  the  bank 
pass  book  regularly  balanced  by  the  bank  at  the  end  of  each  month.  At  this  time  the 
cancelled  checks  previously  issued  and  returned  to  the  bank  are  returned  to  the  Dealer  for 
permanent  filing.  Promptly  upon  securing  back  from  the  bank  the  balanced  pass  book, 
the  first  duty  of  the  bookkeeper  should  be  the  reconciling  of  the  bank  account  shown  by  his 
books  with  that  shown  by  the  bank  pass  book.  This  is  accomplished  by  subtracting  the  sum 
total  of  all  outstanding  checks  (that  is,  all  checks  which  have  been  entered  on  the  Dealer's 
record  but  have  not  yet  been  received  by  the  bank)  from  the  Bank  Balance,  upon  which  the 
remainder  should  agree  with  the  Bank  Balance  shown  by  the  Dealer's  books. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

2.  Bank  Check  Book:    This  book  is  provided  usually  by  the  bank  where  the  account  is  kept  and 

may  be  obtained  in  a  variety  of  forms,  with  either  one,  two,  or  three  checks  to  the  page. 
Reference  has  already  been  made  to  the  importance  of  accurately  recording  the  detail  of 
disbursements  on  the  stubs  of  the  check  book  in  order  to  provide  full  data  for  making  cor- 
rect and  intelligent  entries  of  disbursements  in  the  Cash  Paid  section. 

3.  Receiving  Record:    It  is  usually  very  desirable  to  keep  a  record,  in  a  detailed  and  method- 

ical manner,  of  all  goods  received  and  a  standard  blank-book  with  cash-book  rulings  can 
be  advantageously  used  for  this  purpose.    Columns  should  be  headed  as  follows : 

Date  Received, 

Source  of  Supply, 

Invoice  Date, 

Invoice  Number, 

Kind  of  Goods, 

Number  or  Quantity  of  Units, 

Method  of  Delivery, 

Transportation  Charges. 

Such  a  record  makes  possible  the  accurate  checking  and  verification  of  all  payable  invoices 
for  goods,  when  received. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


4.  Shipping  Record:  It  is  often  advisable  for  the  shipping-clerk  to  keep  a  separate  record  in  a 
bound  book  of  all  shipments  made  from  time  to  time.  This  record  should  be  independent 
from  any  loose-leaf  form  such  as  the  Shipping  Department's  copy  of  customers'  invoices, 
which  is  required  in  the  operation  of  the  bookkeeping  system.  The  headings  on  this  record 
should  include  the  following: 

Date  of  Shipments, 

Consignee, 

Order  Number, 

Kind  of  Goods, 

Method  of  Delivery. 

Number  or  Quantity  of  Units, 

This  record  is  desirable  as  an  auxiliary  to  other  forms  provided  and  frequently  it  will  be 
found  serviceable  in  tracing  shipments  and  checking  deliveries  in  a  convenient  and  acces- 
sible way. 

5.  Daily  Record  of  Bank  Account:  Another  very  useful  record  is  one  providing  for  the  daily 
listing  of  all  bank  deposits,  bank  disbursements  and  net  bank  balances.  Any  bound  or  loose- 
leaf  record  providing  date  and  three  money  columns  is  suitable.  Preferably  the  page  should 
be  long  enough  to  contain  a  full  month's  record  with  a  line  to  each  day.  The  date  column 
should,  of  course,  be  so  headed  and  the  headings  of  the  columns  should  be  in  order- 
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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Deposits,  Disbursements,  Balances.  The  reverse  side  of  this  form  can  very  conveniently 
be  used  for  reconciling  the  bank  balance  at  the  end  of  the  month  in  the  manner  described 
under  "Bank  Pass  Book"  on  page  68.  These  sheets  should,  of  course,  be  preserved  from 
month  to  month,  as  they  provide  a  valuable  comparative  record  for  quick  reference. 


Page  71 


CHAPTER  XIV 

THE  RIGHT  WAY  TO  KEEP  BOOKS 

"The  right  way  to  keep  books  is  to  keep  them  always  up-to-date,  orderly,  legible,  neat  and 
accurate."  Such  an  accomplishment  will  naturally  require  the  expenditure  of  considerable  ef- 
ford.  It  has  been  said  that  "the  gods  sell  everything  to  everybody  at  a  price,  and  that  price 
is  EFFORT."    Nothing  can  be  accomplished  without  it ;  nothing  worth  while  is  ever  very  easy. 

The  Bookkeeper's  Importance 

The  term  "Bookkeeping"  at  once  implies  and  suggests  the  word  "Bookkeeper" ;  and  while 
it  is  not  contended  that  a  person  must  have  graduated  from  a  commercial  school  or  otherwise 
have  attained  a  complete  technical  knowledge  of  accounts  before  he  is  qualified  to  keep  books, 
the  point  is  made  and  emphasized  that  books  will  not  be  kept  without  some  one  to  keep  them. 
Some  one  must  be  the  Bookkeeper,  or  probably  more  accurately  stated,  the  "Account  Recorder." 

As  a  rule,  the  proper  keeping  of  a  set  of  books  in  any  business  of  reasonable  volume,  re- 
quires at  least  a  large  part  of  the  time  of  some  one  individual ;  and  personal,  intelligent,  and  fre- 
quently exclusive  attention  is  essential  to  the  successful  operation  of  a  set  of  books. 

It  must  be  borne  in  mind  that  the  mere  purchase  of  a  bookkeeping  system,  or  even  its 
installation  in  a  business  will  not  produce  satisfactory  results;  the  work  once  started  must  be 
consistently  and  assiduously  maintained.     Neither  this  system  nor  any  other  similar  thereto,  is 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEA  L ERS 

automatic,  except  in  one  respect — stopping!    That  is  one  function  which  we  are  sure  this  system 
and  probably  many  others,  will  perform  perfectly ! 

Nevertheless,  we  are  equally  sure  it  will  serve  a  very  useful  purpose  and  reveal  some  very 
interesting  and  instructive  information  if  it  is  given  the  time  and  attention  which  it  rightfully 
deserves.  If  it  is  true  that  "bookkeeping  is  just  good,  common  sense  applied  to  accounts,"  and 
if  "after  correct  principles  are  ascertained,  the  rest  is  a  matter  of  detail,"  then  we  believe  any 
young  man  or  woman  with  high-school  education  can,  by  close  application  and  intensive  study 
for  a  short  time,  become  competent  to  keep  this  bookkeeping  system  in  an  accurate  and  satis- 
factory manner. 

In  the  event  it  is  impossible  or  impracticable  to  secure  an  all-time  bookkeeper,  we  strongly 
recommend  and  urge  a  Dealer  to  engage  a  bank-clerk  or  some  other  outside  person  with  book- 
keeping experience  to  keep  his  accounts  by  means  of  this  system,  during  evenings  or  Saturday 
afternoons.  Results  thus  attained,  while  not  commensurate  with  those  probably  secured  through 
the  employment  of  an  all-time  bookkeeper,  will,  we  are  sure,  well  repay  any  Dealer  for  so  hand- 
ling this  important  branch  of  his  business. 


Page  73 


CHAPTER  XV 

GENERAL  SUGGESTIONS 

The  following  suggestions,  viewed  largely  from  a  bookkeeping  standpoint,  will  undoubtedly 
be  found  advantageous  in  the  successful  operation  of  a  Dealer's  business: 

1.  The  Dealer's  premises — office,  store,  warehouse,  stockroom,  etc. — should  always  be  kept  clean, 
orderly,  and  well-arranged. 

2.  The  stockroom  proper  should  be  enclosed  and  kept  under  lock  and  key  and  some  one  person  should 
be  placed  in  charge  and  held  responsible  for  all  goods  therein  contained. 

3.  The  Delco-Light  business  should  be  kept  separate  and  distinct  from  all  other  undertakings  of  every 
kind,  both  from  an  operating  and  bookkeeping  standpoint. 

4.  Office  equipment  providing  security  of  money  from  theft  and  books  and  records  from  fire,  should,  of 
course,  be  provided. 

5.  Letters,  checks,  invoices,  bills-of-lading,  shipping  memoranda  and  papers  of  every  kind,  should  be 
systematically  filed  to  admit  of  convenient  and  ready  reference. 

6.  "Store  sales"  or  "cash  sales"  should  be  carefully  recorded  on  small  sales  books,  which  are  especially 
provided  for  that  purpose  and  can  be  purchased  at  almost  any  stationery  store.  An  individual, 
detailed  record  should  be  made  of  every  transaction,  one  copy  of  which  is  permanently  retained  in 
the  book.  Such  records  can  be  converted  into  book  records  at  the  end  of  each  day,  week,  or  month 
as  may  be  found  advisable. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

7.  Payable  invoices  for  all  goods  received  or  expenses  incurred,  should  be  required  of  creditors 
promptly,  even  to  the  extent  of  tracing  the  creditors  for  such  papers  when  necessary. 

8.  The  Dealer  should  charge  the  bookkeeper  with  the  responsibility  of  keeping  his  books  right  and  to 
this  end  he  should  make  all  employees,  including  salesmen,  servicemen,  stockkeepers,  clerks  and 
wiremen  accountable  to  him  for  necessary  clerical  records  which  the  successful  operation  of  a  book- 
keeping system  requires.  In  other  words,  the  Dealer  must  give  the  bookkeeper  his  unqualified  sup- 
port in  conducting  all  operations  and  in  securing  essential  details  which  form  the  basis  of  bookkeep- 
ing entries,  otherwise  his  hands  will  be  tied  and  unsatisfactory  results  will  follow. 

9.  A  distribution  stamp  for  all  payable  invoices  will  be  found  advantageous. 

10.  An  endorsement  stamp  for  bank  checks,  to  be  imprinted  on  the  reverse  side  of  all  checks,  provides 
a  very  good  simple  voucher  system. 

11.  It  is  sometimes  helpful  in  contemplating  the  true  meaning  of  books  of  account  to  think  of  accounts 
as  persons  who  are  responsible  or  accountable  to  the  owner  of  the  business  for  whatever  value  they 
may  show. 

12.  The  posting  of  books  by  bookkeepers  should,  as  far  as  possible,  be  kept  up-to-date  each  day.  All 
clerical  work  should  be  promptly  performed  and  books  should  be  closed  and  financial  statements 
drawn  off  promptly  after  the  close  of  each  month. 

13.  Attention  to  correspondence  should  be  a  daily  duty  of  either  the  Dealer  or  his  bookkeeper.  The 
punctual  answering  of  mail  and  telegrams  is  a  splendid  indication  of  the  efficiency  of  an  office. 

14.  Pages  of  each  section  of  the  bookkeeping  set  should  be  numbered  serially  beginning  at  1. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


15.  Trial  balances  should  be  taken  at  the  end  of  each  month  just  as  soon  as  original  entries  for  the 
month  have  been  made  and  posted.  Of  course,  it  is  highly  desirable  to  have  each  month's  entries 
include,  as  far  as  possible,  all  business  belonging  to  that  month. 

16.  Enter  orders  on  customers'  invoice  forms  when  received,  as  far  as  the  information  at  hand  makes 
possible.  File  such  orders  under  proper  delivery  due  date  on  a  "month  and  day"  file.  This  makes 
possible  ready  reference  to  all  unfilled  orders  and  facilitates  punctual  deliveries. 

17.  Bond  your  bookkeeper  and  hold  him  responsible,  if  competent,  for  not  only  the  proper  keeping  of 
accounts,  but  for  all  cash,  bank  and  inventory  transactions.  It  is  a  splendid  plan  for  the  bookkeeper 
to  at  least  countersign  all  bank  checks. 

18.  It  is  very  desirable  for  a  Dealer  to  pay  himself  out  of  his  business,  or  at  least  credit  his  personal  sal- 
ary account  with  a  certain  stipulated  weekly  or  monthly  salary  in  the  same  manner  as  other  em- 
ployees are  paid.  In  this  way  the  business  is  not  subjected  to  spasmodic  withdrawals  for  the  Deal- 
er's personal  needs  and  the  bookkeeper  can  plan  more  successfully  to  have  funds  in  hand  for  regu- 
lar pay-roll  withdrawals. 

19.  Each  different  class  of  goods  sold — that  is,  plants,  pumps,  accessories,  etc. — should  always  be  in- 
voiced on  a  consistent  price  basis ;  that  is,  the  sales  price  used  on  all  invoices  and  entered  on  the 
books  should  be  preferably  at  prevailing  list  price  and  any  different  net  sales  prices  should  be  pro- 
vided for  by  different  rates  of  commission  or  discount  which,  of  course,  are  treated  in  this  set  of 
books  as  expenses.    "Consistency  is  a  jewel"  in  bookkeeping,  quite  as  truly  as  in  any  other  practice. 

20.  Physical  inventories  should  always  be  priced  at  cost,  or  at  market  if  the  market  is  lower  than  cost. 
Inventories  should  never  be  priced  at  market  if  market  prices  are  higher  than  actual  cost. 

21.  Undelivered  orders  on  hand,  or  sales  booked  as  distinguished  from  sales  billed — that  is,  bona  fide 
orders  covering  goods  which  have  not  yet  been  shipped — may  be  properly  shown  on  a  financial  state- 
Page  76 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

ment  only  as  a  foot-note.    It  is  never  right  to  count  unshipped  orders  as  sales,  or  to  incorporate  them 
in  the  main  body  of  a  financial  statement. 

22.  The  subject  of  insurance  is  one  which  should  always  be  given  careful  attention  by  Dealers  and  an 
adequate  amount  of  fire  insurance  covering  all  permanent  assets  and  inventories  should,  of  course, 
always  be  maintained.  At  least  the  following  kinds  of  insurance  on  all  automobiles  and  trucks  are 
recommended : 

Fire, 

Theft, 

Public  Liability,  and 

Property  Damage. 

23.  All  employees  handling  cash,  securities,  or  convertible  assets  should  be  properly  bonded. 

24.  A  memorandum  file  or  tickler,  for  recording  daily  duties,  maturity  of  notes,  or  other  obligations,  the 
fulfillment  of  promised  installations  or  deliveries,  will  be  found  very  useful  and  such  a  record  can 
be  readily  purchased  at  almost  any  stationery  store. 

25.  Credit  memoranda  received  from  Distributors  for  installation  reports  as  now  issued,  should  be 
treated  as  a  part  of  the  sale  price  of  the  plant ;  in  other  words,  the  credits  should  be  journalized 
when  received,  debiting  the  Distributor  and  crediting  Account  No.  201  (Sales  of  Plants  and  Bat- 
teries). 

26.  When  a  salesman  is  employed  on  salary  and  commission,  or  on  a  commission  basis  with  a  drawing 
account  privilege,  all  commission  credits  and  all  salary  and  commission  payments  to  him  should  be 
handled  through  a  personal  account  under  Account  No.  42.  In  this  way  a  complete  and  satisfactory 
record  of  all  commissions  earned  and  all  payments  made  to  him  can  be  conveniently  maintained 
and  a  definite  and  satisfactory  understanding  can  always  be  provided  by  the  rendering  of  frequent 
statements  of  account. 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


27.  The  following  is  an  example  of  the  opening  entry  in  starting  a  Dealer's  Bookkeeping  System.  The 
values  indicated  in  their  relation  to  each  other  or  to  a  Dealer's  business  as  a  whole,  are  not  to  be  taken 
in  any  sense  as  a  criterion.  The  sole  purpose  has  been  to  illustrate  the  clerical  entry  without  critical 
regard  for  values  involved. 


DEBITS 


January  1- 


Land, 

Machinery  and  Shop  Equipment, 

Furniture  and  Fixtures, 

Demonstrating  Equipment, 

Automobiles, 

Cash  in  Bank, 

Accounts  Receivable, 

(Detail) 
Notes  Receivable, 
Trade  Acceptances  Receivable, 
Prospective  Commissions  Receivable, 
Personal  Accounts, 

(Detail) 
Inventories, 

(Detail) 
Consigned  Goods, 
Investments, 
Interest  Prepaid, 
Insurance  Prepaid, 


Account  No.  11 
Account  No.  16 
Account  No.  17 
Account  No.  18 
Account  No.  19 
Account  No.  31 
Account  No.  36 

Account  No.  37 
Account  No.  38 
Account  No.  39 
Account  No.  42 

Accounts  Nos.  51-57 

Account  No.  66 
Account  No.  71 
Account  No.  81 
Account  No.  82 


$  1,000.00 
100.00 
200.00 
500.00 

1,000.00 
500.00 

3,000.00 

800.00 

400.00 

120.00 

35.00 

2,000.00 

150.00 

500.00 

25.00 

25.00 

$10,355.00 


Page  78 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Reserve  for  Depreciation, 
Reserve  for  Uncollectables, 
Mortgages, 
Accounts  Payable, 

(Detail) 
Notes  Payable, 
Trade  Acceptances  Payable, 
Prospective  Commissions  Payable, 
Accrued  Salaries, 
Accrued  Taxes, 
Accrued  Interest, 

Capital, 
Surplus, 


CREDITS 

Account  No.  26 
Account  No.  46 
Account  No.  101 
Account  No.  Ill 

Account  No.  112 
Account  No.  113 
Account  No.  114 
Account  No.  121 
Account  No.  122 
Account  No.  123 

Account  No.  181 
Account  No.  182 


$       150.00 

245.00 

500.00 

1,500.00 

1,000.00 
200.00 

75.00 
200.00 
100.00 

75.00 

4,350.00 
1,960.00 

$10,355.00 


For  opening  the  books  of  account  of 

Dealer  in  Delco-Light  Products,  as  determined  by  inventory  of  all  Assets  and  Liabilities  taken  on. 

192 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

Successful  Dealers — Real  Financiers 

28.  A  successful  Dealer  in  this  business,  at  least  to  a  certain  extent,  must  be  a  real  financier;  and  book- 
keeping may  logically  be  regarded  as  the  fifth  of  five  distinctive  financial  features  involved  in  prac- 
tically every  sale  of  Delco-Light  products.     The  four  preceding  considerations  are  as  follows : 

a.  Credit, 

b.  Terms  of  Sale, 

c.  Collections, 

d.  Banking. 

These  are  briefly  called  attention  to  as  follows: 

a.  Credit:     Customers  must  be  known  to  be  responsible;  in  other  words,  to  be  good  for  the  amount  of 

their  purchases.  When  this  fact  has  not  been  definitely  and  satisfactorily  established,  steps 
should  be  taken  to  secure  absolute  protection  on  the  sale  by  mortgage,  conditional  sale  contract,  or 
other  security.  There  is  no  profit  in  selling  goods  to  purchasers  who  are  unable  or  unwilling  to 
pay  their  accounts  when  due.  Local  bankers  are,  as  a  rule,  splendid  credit  references  and  are  able 
to  give  Dealers  very  reliable  information  with  reference  to  the  responsibility  of  almost  any  rural 
resident  in  their  communities. 

b.  Terms  of  Sale:     Delco-Light  products  are  high-grade  goods  and  terms  of  sale   should   be   strictly 

confined  to  cash  or  bankable  note,  or  a  combination  of  the  two.  Good-sized  cash-with-order  pay- 
ment is  an  important  requirement  of  many  successful  Dealers.  While  cash  is,  of  course,  always  to 
be  preferred  and  should  be  secured  whenever  possble,  it  is,  nevertheless,  a  questionable  policy  to 
arbitrarily  require  nothing  but  cash  in  settlement  for  products.  It  is  undoubtedly  true  that  a 
larger  and  more  profitable  business  can  be  carried  on  where  a  Dealer  is  in  a  position  to  accept  a 

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reasonable  amount  of  business  on  a  time-settlement  basis.  Local  bankers  are  extremely  valuable 
in  assisting  Dealers  in  properly  financing  those  time  sales  which  they  are  not  in  position  to  carry 
themselves.  Terms  of  sale  are  frequently  a  matter  of  mental  attitude.  Dealers  and  Salesmen  must 
believe  in  good  terms  in  order  to  secure  them.  More  liberal  sales  terms  are  sometimes  offered  in 
connection  with  the  sale  of  inferior  products.  It  is  important  for  Dealers  and  Salesmen  to  remem- 
ber that  they  are  selling  DELCO-LIGHT  and  NOT  terms. 

c.  Collections:     Complete  payment  or  settlement  for  Delco-Light  plants  should  be  secured  no  later  than 

when  the  lights  are  first  turned  on  and  for  other  products  at  the  time  of  complete  installation.  It 
is  always  advisable  to  make  sales  with  this  understanding  and  to  insist  on  settlement  as  indicated. 
A  poor  business  man  is  usually  a  poor  collector,  while  a  good  business  man  is  always  a  good  regu- 
lator of  his  receivables  and  a  good  collector  of  all  amounts  due  him.  It  is  well  to  remember  that 
the  best  satisfied  customers  are  usually  the  ones  that  have  paid  in  full ;  also,  that  a  good  many  imag- 
inary troubles  and  resulting  service  calls  develop  where  the  purchase  price  has  not  been  fully  paid. 

d.  Banking:    Bankers  are  usually  of  great  assistance  to  Delco-Light  Dealers  in  promoting  their  business 

in  at  least  the  following  respects : 

a.  As  users, 

b.  As  advertisers  or  promoters  of  their  business, 

c.  As  credit  references  or  counsel, 

d.  As  lenders  of  money,  and 

e.  As  advisors. 

Dealers,  in  order  to  do  business  with  a  bank  satisfactorily,  must  comply  with  he  following 
requirements: 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

a.  They  must  be  good  moral  risks, 

b.  They  must  be  willing  to  allow  the  bank  to  make  a  reasonable  profit  out  of  their  business, 

c.  They  must  meet  their  obligations  to  their  banks  punctually, 

d.  They  must  be  successful  in  their  undertakings,  and 

e.  They  must  establish  themselves  as  business  men  in  their  communities. 

Any  business  man  may  possibly  do  a  small  business  without  using  the  advantages  and  benefits  of 
a  banking  connection,  but  a  business  of  considerable  size  and  profitableness  is  always  conducted 
with  the  aid  of  at  least  one  bank.  Aside  from  the  mere  convenience  of  using  a  bank  as  a  depos- 
itory, the  credit  standing  and  the  ability  to  borrow  money,  when  needed,  are,  of  course,  prime 
considerations. 

It  is  increasingly  important,  as  a  business  grows,  for  the  owner  or  manager  to  build  up  a 
satisfactory  relation  with  his  banker. 

The  careful  observance  of  the  four  financial  features  mentioned  above,  in  addition  to  that  of 
keeping  proper  books  of  account,  will  be  highly  conducive  toward  the  success  and  satisfaction  of 
any  business  man's  undertaking  and  this  is,  of  course,  just  as  true  of  Delco-Light  Dealers  as  of 
any  other  class  of  business  men. 


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CHAPTER  XVI 
PERTINENT  QUOTATIONS 

The  following  quotations  from  competent  authorities  are  peculiarly  pertinent  to  the  subject 
matter  previously  presented ;  and  as  they  contain  some  very  valuable  truths  on  the  subjects  of 
bookkeeping,  profitable  conduct  of  business,  personal  efficiency,  causes  of  failure,  organization 
of  business  and  business  methods  in  general,  they  are  regarded  as  an  appropriate  conclusion  to 
this  descriptive  booklet. 

We  believe  all  Dealers  should  read  and  review  these  quotations  until  they  become  thor- 
oughly imbued  with  the  constructive  ideas  and  the  progressive  viewpoints  which  they  present. 

"The  first  principle  of  efficiency  is  RECORDS;  and  the  intelligent  and  discriminating  use  of  rec- 
ords, the  ability  to  analyze  and  investigate  through  their  use,  is  the  first  fundamental  to  efficiency." 


"It  takes  moral  courage  to  face  facts." 


"Bookkeeping  is  a  business  fundamental." 


"It  is  very  important — indeed,  absolutely  essential,  for  a  successful  business  man  to  realize  the 
full  meaning  of  his  books  of  account." 

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"Self-deception  is  often  disastrous." 


"Among  causes  of  failure  within  a  business  itself,  probably  the  first  is  the  owner's  inability,  or 
unwillingness,  to  divest  himself  of  details  and  to  trust  to  the  judgment  of  others."  (This  certainly 
argues  for  a  bookkeeper  charged  with  the  responsibility  of  accurately  keeping  the  books.) 


"Another  cause  of  business  men's  failure  is  due  to  their  neglect  to  study  their  books,  to  analyze 
their  expenses  and  to  examine  into  the  truth  about  their  finances." 


'Another  frequent  cause  of  business  failure  is  BAD  bookkeeping." 


"Eternal  vigilance  is  the  price  of  business  safety." 


"No  merchant  can  be  easy  in  mind  or  fair  to  his  business  creditor  or  bank,  or  even  the  business 
public,  who  cannot  tell  whether  or  not  his  business  enterprise  is  making  a  profit." 


"The  only  way  a  merchant  can  tell  whether  his  business  is  or  is  not  making  a  profit,  is  by  keeping 
certain  records- — commonly  called  'Books  of  Account.'  " 

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"Most  failures  and  bankruptcies  are  due  to  a  lack  of  information  as  to  how  the  business  is  prosper- 
ing or  suffering.    A  simple  bookkeeping  system  would  supply  the  necessary  information." 


"It  is  a  credit  man's  duty  to  see  that  his  customers  have  a  system  of  bookkeepng  suitable  to  their 
individual  requirements." 


"Without  keeping  books  of  account,  a  merchant  unconsciously  'goes  on  the  rocks'  or  loses  the  chance 
of  making  his  business  profitable." 


'Business  methods  are  constantly  becoming  more  and  more  necessary  in  every  enterprise." 


"Lack  of  adaptability  and  training  are  the  chief  contributing  causes  for  failures  in  the  merchan- 
dising field  and,  though  independence  of  action  has  been  the  controlling  spirit  of  our  nation,  and  we 
have  permitted  and  condoned  wastes  which  in  the  older  and  more  thickly  populated  countries  would  not 
and  could  not  be  tolerated,  yet  we  are  beginning  to  understand  that  economic  waste  where  avoidable 
should  be  prevented  by  reasonable  and  proper  means,  and  that  there  can  be  no  greater  economic  waste 
than  a  human  failure.  Native  shrewdness  may  supply  abilities  for  successful  merchandising  without 
incorporating  in  the  enterprise  a  bookkeeping  system  but  there  would  follow  a  vast  saving  in  our  mer- 
cantile enterprises  if  they  were  operated  under  a  bookkeeping  system,  of  a  type  and  character  conform- 
ing with  the  character  and  extensiveness  of  the  enterprise." 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

"A  real  business  man  always  keeps  books  of  account.     Every  Delco-Light  Dealer  should  be  a  real 
business  man.    Therefore,  every  Delco-Light  Dealer  should  keep  books  of  account." 


'Correct  records  of  all  transactions  are  a  fundamental  basis  for  the  effective  economic  regulation 


of  affairs  of  every  person,  partnership,  corporation  and  government." 


"Just  judgments  are  rendered  only  when  based  on  a  correct  knowledge  of  facts." 


"Incompetent  accounting  is  the  cause  of  more  failures  than  all  other  causes  combined." 


"Incompetent  accounting  is  also  the  cause  of  retarding  economic  development.  It  fails  to  show  where 
economies  may  be  effected  that  may  enhance  profits  and  give  advantages  in  meeting  competition." 


"System  means  to  a  business  what  good  tools  mean  to  a  craftsman.  A  merchant  can  no  more  do 
good  work  than  a  craftsman  can  do  good  work  unless  he  has  the  mechanical  means,  and  the  mechan- 
ical means  of  a  business  is  System." 

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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

"The  ways  of  judging  your  business,  past,  present  and  future,  are  many  and  devious — in  fact,  to 
judge  your  business  fairly  you  must  review  the  past,  know  the  present  and  judge  the  future  from  what 
you  have  done  and  what  you  are  doing,  coupled  with  a  careful  survey  of  the  field  in  which  you  operate." 


"The  following  principles  for  the  conduct  of  business  apply  to  practically  every  enterprise : 

"1.  Get  a  comprehensive  view  of  the  whole  field  of  your  business. 

"2.  Make  a  list  of  all  the  factors  involved  in  your  problems. 

"3.  Weigh  each  factor  in  relation  to  all  the  others. 

"4.  Determine  which  ones  are  the  major  factors  in  the  situation  in  which  you  find  yourself. 

"5.  Get  a  detached  view  of  yourself  and  of  your  business. 

"6.  Concentrate  on  the  essential  things." 


"The  man  who  does  not,  every  now  and  then,  go  down  to  the  foundations  of  his  business,  to  the 
fundamentals  of  his  personal  capacity  and  performances,  to  find  out  what  he  has  of  real  value  and  to 
look  himself  squarely  in  the  face,  is  playing  luck  against  law." 


'A  man  must  have  the  facts — all  the  facts — before  he  can  think  about  them  correctly.    Half  knowl- 


edge of  facts,  or  whole  knowledge  of  misinformation,  means  poor  thinking  and  incorrect  conclusions. 
We  must  get  the  facts  of  things  before  we  can  evolve  laws  to  govern  our  actions  with  respect  to  those 
things." 

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"Get  down  to  it  and  study  your  business." 


"One  great  trouble  with  many  men  is  that  they  do  NOT  see  their  business  as  a  whole ;  or,  rather, 
they  do  not  see  the  whole  field  of  their  business.  A  man  is  prone  to  concentrate  his  interest  and 
therefore  his  effort,  on  one  factor,  but  without  making  sure  that  it  is  the  essential  one." 


'Business  is  a  science  which  is  being  formulated  more  and  more  definitely." 


"Every  man  conducts  his  business  on  some  theory  or  other.    To  evolve  correct  theories  through  study 
and  comparison  and  analysis  and  experiment,  is  the  essential  thing." 


"ANALYSIS  is  a  very  important  business  tool.  The  faculty  of  resolving  any  business  prob- 
lem into  all  its  component  parts  and  then  concentrating  on  the  essential  features,  is  absolutely  funda- 
mental in  any  involved  proposition." 

"Another  tool  of  which  business  men  do  not  avail  themselves  as  they  should  is  one  of  BUSINESS 
STATISTICS.  The  mere  mention  of  the  word  'statistics'  is  enough  to  frighten  the  average  person.  But 
there  should  not  be  any  such  feeling,  for  statistics  are  really  human  experience  told  in  brief.  They  are 
full  of  interest  often  surprising,  even  dramatic  and  the  man  who  pays  no  attention  to  the  statistics  of 
business  is  getting  along  without  one  of  the  most  helpful  implements  of  his  trade." 

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"  'Keeping  your  eye  on  your  business'  (as  a  whole) ,  is  quite  as  important  in  BUSINESS  as  'keeping 
your  eye  on  the  ball'  in  a  GAME." 


'Wastefulness  in  commerce  is  one  of  our  weakest  spots." 


"Many  men  resent  being  awakened.  They  like  the  morning  nap  with  its  vague  dreaming,  when  the 
world  is  neither  wholly  present  nor  wholly  absent,  but  swims  in  a  haze  of  floating  phantoms  and  reality. 
But  the  alarm-clock  of  science  clatters  on  intermittently,  until  the  man  arises,  or  does^what  is  much 
worse— he  sleepily  and  petulantly  turns  over,  turns  off  the  alarm,  and  goes  back  to  sleep!" 


"Of  all  the  silly,  childish  cants  in  this  world,  the  cant,  'My  business  is  different.'  is  the  most  torment- 
ingly  provincial." 

"Revenues  increase  arithmetically,  but  expenses  increase  geometrically." 


"No  man  can  stand  alone  in  life  or  work  alone  in  business,  and  at  the  same  time  obtain  for  himself 
the  same  rewards  in  money,  or  satisfaction,  or  influence,  or  happiness,  as  when  he  works  with  and  by  and 
through  the  house,  the  department  and  social  body  for  the  good  of  that  all,  of  which  he  is  a  part.  Bees 
don't  ignore  this  law;  man  fails  when  he  does." 

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"There  are  literally  thousands  of  retailers  failing  to  make  money  because  they  haven't  a  book- 
keeping system  that  tells  them  what  they  are  doing." 


'"You  must  put  your  whole  body's  spirit  into  doing  a  thing." 


"Loyalty  to  things  worth  while  is  made  up  of  three  parts: 

"1.  A  definite  thing  worth  while  to  be  accomplished. 

"2.  An  abiding  assurance  that  our  utmost  satisfaction  lies  in  the  accomplishment  of  this  defi- 
nite thing. 
"3.  A  persistent  effort  for  its  accomplishment." 


"I  have  had  occasion  to  say  what  has  been  often  said  by  others,  that  a  man  can  see  in  a  thing 
only  what  he  knows  about  it,  and  this  particularly  applies  to  the  problem  of  the  education  of  ourselves 
and  our  men." 


"He  who  every  morning  plans  the  transactions  of  the  day,  and  follows  out  that  plan,  carries  a 
thread  that  will  guide  him  through  the  labyrinth  of  the  most  busy  life.  The  orderly  arrangement  of  his 
time  is  like  a  ray  of  light  which  darts  itself  through  all  his  occupations.  But  where  no  plan  is  laid, 
where  the  disposal  of  time  is  surrendered  merely  to  the  chance  of  incidents,  chaos  will  soon  reign." 

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"In  order  to  succeed,  a  man  must  have  imagination.  He  must  definitely  see  in  the  near  or  distant 
future  the  perfect  thing  which  he  wishes  to  obtain.  He  must  IMAGINE  the  ultimate  results  of  his 
endeavor." 


"The  uncertain  man  produces  the  uncertain  results." 


"There  must  be  definite  thinking  about  definite  work,  as  the  first  essential  to  a  realization  of  it. 
After  definite  thinking  about  our  own  work  comes  the  arrangement  of  our  daily  lives  in  a  way  effectively 
to  accomplish  that  thing." 

"A  careful  analysis  of  the  working  methods  of  over  six  thousand  retailers,  showed  that  but  ten  per 
cent  of  them  maintained  any  records  that  could  tell  them: 

"1.  What  they  had  in  stock. 

"2.  What  profit  they  were  actually  getting  on  any  line  of  goods. 

"3.  What  the  expenditures  for  salesmen,  advertising,  or  special  sales  were  actually  producing 
in  profit  or  loss. 

"4.  What  the  percentage  of  expense  was  upon  any  distinct  body  or  class  of  sales  or  merchan- 
dise." 


"It  is  the  curse  of  the  retail  merchant  in  this  country  that  he  hasn't  a  definite  conception  of  the 
kind  or  amount  of  work  he  must  do  with  a  given  environment  of  neighborhood,  prospective  custo- 
mers, equipment  of  employees,  stock,  capital,  etc.,  in  order  to  get  a  certain  result.  Therefore,  he  does 
not  keep  any  record  of  what  he  does.  Every  time  a  retailer  fails,  we  find  the  same  condition — he  didn't 
know  what  he  was  doing  and  did  not  know  how  badly  he  was  doing  it." 

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"How  can  a  man  determine  what  he  must  do  until  he  knows  definitely  what  he  or  others  like  him  can 
do  or  have  done?  Most  men  are  hopeless  because  they  are  thoughtless.  Just  as  soon  as  a  man  knows 
that  he  is  working  in  harmony  with  the  eternal  laws  of  success,  just  as  soon  as  he  is  convinced  that  the 
thing  which  has  made  others  successful  is  the  thing  he  can  do,  he  will  work  with  greater  certainty  and 
without  the  paralyzing  dread  of  that  unknown  preventable  thing  which  he  suspects  is  lying  in  wait  along 
every  road  he  travels.  Give  him  the  vision  of  things  worth  while  and  he  gains  confidence  in  the  law 
and  he  works  with  the  hope  of  doing  better." 


"In  business,  the  Devil  and  Dame  Chance  are  blamed  for  much  that  is  plainly  due  to  ignorance  of 
the  rules  of  the  game." 


"The  real  man  is  loyal  to  the  truth  because  he  wants  the  truth  and  nothing  but  the  truth,  no  matter 
how  much  it  hurts  him  or  the  other  man." 


"Many  business  men  are  never  happy  unless  they  have  a  finger  in  every  detail  of  their  organization. 
This  is  not  executive  control.  It  is  executive  interference  and  it  has  very  far-reaching  results  in  any 
business- It  robs  the  departmental  managers  of  responsibility  and  initiative.  System  is  the  soul  of  busi- 
ness and  is  the  living  spirit  of  any  concern  whether  large  or  small.  I  believe  that  the  business  executive 
should  systematize  everything  down  to  the  smallest  detail.  It  is  the  small  details  in  business  which  are 
so  apt  to  be  overlooked ;  and  yet  at  the  end  of  a  year,  they  have  a  way  of  affecting  profits  to  a  very  ma- 
terial extent.    But  executive  care  for  details  is  entirely  different  from  interference  in  details." 

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'Rules  for  Success  in  Retailing: 

"1.  Keeping,  as  an  ever-present  necessity  of  a  healthy  business,  an  accurate  knowledge  of 
credit,  both  in  buying  and  selling. 

"2.  Taking  precautions  not  to  overbuy,  by  having  a  thorough  knowledge  of  both  buying  and 
selling  conditions  and  merchandise. 

"3.  The  successful  merchant  makes  business  by  energetic  and  intelligent  hustling;  he  never 
waits  for  it  to  grow.  The  average  business  man  may  use  a  lot  of  energy  in  soliciting  busi- 
ness, but  he  does  not  study  intelligently  the  conditions  of  his  territory  or  the  wants  of  his 
prospective  customer  in  order  that  he  may  effectively  apply  the  energy. 

"4.  The  successful  business  man  advertises  in  some  form  or  other. 

"5.  The  successful  business  man  has  always  placed  the  accent  on  head  work  instead  of  hand 
and  foot  work.  A  special  investigation  of  nearly  five  hundred  retailers  showed  that  but 
thirty-one  of  them  had  any  system  of  accounting  that  would  be  accepted  by  the  insurance 
people  as  prima  facie  evidence  in  the  adjustment  of  loss  in  the  case  of  fire.  The  proprietors 
of  most  stores  were  busy  ten  to  twelve  hours  a  day  at  work  which  a  three-dollar  to  nine- 
dollar-a-week  clerk  could  do  just  as  well.  Their  window  displays  were  changed  but  once 
a  month ;  they  left  their  advertising  to  the  local  newspaper  man ;  and  in  but  few  cases  ever 
had  even  a  visiting  bookkeeper  tell  them  what  the  real  condition  of  their  business  was. 
Mere  busy-ness  isn't  business,  or  a  pig's  tail  would  be  the  most  efficient  part  of  the  pig." 


"More  than  one  business  has  found  itself  in  the  bankruptcy  court  through  an  unnoticed  leak  that 
had  had  free  play  during  a  long  period.  The  remedy  for  this  state  of  affairs  is  an  efficient  system  of  con- 
tinuous analysis  of  the  financial  records  of  a  business." 

Page  93 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

"Records  kept  in  a  haphazard  way,  or  not  kept  at  all,  don't  mean  'less  office  expense' ;  they  mean 
chances  missed,  sales  lost,  efforts  wasted." 


"Usually  when  a  man  falls  short  of  success,  the  trouble  lies  in  some  specific  direction;  it  may  be  bad 
judgment  in  buying;  it  may  be  poor  selling  methods  it  may  be  improper  handling  of  people;  it  may  be 
bad  bookkeeping,  or  no  bookkeeping  at  all.  Whatever  the  fault,  I  believe  men  could  educate  themselves 
out  of  it,  if  they  really  resolved  to  do  so  and  went  about  it  intelligently." 


"Beware  of  misinformation!" 


"One  of  the  first  things  that  a  man  has  to  learn  in  business  is  how  little  he  can  do  by  himself.  When 
he  finds  that  out,  he  begins  to  look  around  for  people  to  do  what  he  can't." 


'Round  numbers  are  the  cloak  of  ignorance ;  definite  figures  form  the  basis  of  action." 


"Build  your  system  and  your  facts  to  give  you  not  the  approximate,  the  probable,  the  perhaps — 
but  the  precise,  the  actual,  the  definite." 


"Ignorance  spells  weakness.     Knowledge  is  power." 

Page  94 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


"A  great  number  of  business  men  refuse  to  apply  the  principle  of  CONCENTRATING  ON  THE 
ESSENTIAL  THING.     In  applying  this  principle,  there  are  certain  tools  which  should  be  used. 

"It  is  perfectly  simple  to  know  the  amount  of  goods  on  hand,  the  gross  sales,  the  accounts  payable 
and  receivable,  the  amount  of  the  rent,  taxes  and  insurance,  the  wages  paid  and  so  on.  Quantitative 
measurements  can  be  applied  to  these  and  other  items.  But  in  order  to  apply  it  scientifically,  we  need 
a  very  practical  tool,  perhaps  the  most  practical  one  in  business — a  good  bookkeeping  system. 

"It  is  an  amazing  fact  that  very  many  men  attempt  to  carry  on  their  business  without  this  tool. 
Scores  and  hundreds  of  business  men  have  no  bookkeeping  system  whatever.  All  they  have  to  show  them 
where  they  stand  financially  is  a  pile  of  bills!  Others  have  a  sort  of  crude,  'home-made'  system  which 
is  almost  as  inadequate  as  none  at  all." 


"Modern  bookkeeping  is  built  around  this  idea  of  testing  the  various  parts  of  business  so  that  youf 
shop  or  store  may  be  expanded  in  profitable  directions  and  any  sign  of  unprofitable  business  can  be 
cured  before  it  spreads  to  serious  dimensions. 

"When  you  install  a  new  set  of  books,  study  your  business  carefully  and  guide  yourself  not  by  the 
forms  of  bookkeeping  routine,  but  by  the  principles.  Aim  to  secure  the  least  involved  system  which  gives 
you  absolute  accuracy,  promptness  and  the  figures  which  you  must  build  for  success.  Look  beyond  the 
forms  and  get  records  that  are  accurate,  balances  that  clear  your  vision  of  details  and  spotlight  the  par- 
ticular totals  which  prove  your  success,  your  mistakes  and  your  standing,  with,  finally,  such  statistics 
as  give  you  a  picture  of  your  tendencies." 

Page  95 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


"The  prime  requisite,  therefore,  is  to  find  the  facts,  be  sure  of  them  and  then  let  the  facts  lead  you 
where  they  must.  You  must  make  your  personal  preferences  step  aside;  you  must  forget  yourself;  you 
must  wish  with  all  your  heart  to  find  the  truth,  no  matter  how  hostile  the  conclusions  may  be  to  your  own 
idea  of  what  the  truth  should  be.    Be  fair  to  yourself  and  to  your  work. 

"If  you  want  to  learn  whether  you  are  making  money  on  any  particular  thing,  look  for  the  truth  about 
it — but  be  sure  it  is  the  absolute  truth,  for  that  is  the  only  way  you  can  ever  make  money.  It  is  a  baffling 
mystery  why  there  are  so  many  business  men  who  make  absolutely  no  effort  and  thereby  refuse  to  know 
the  whole  truth  about  their  work  or  business.  The  scientific  standards  of  truth  enforce  continued  self- 
criticism.  There  is  no  place  for  'maybes'  or  'almosts,'  or  indefinite  approximations,  but  only  for  the  facts, 
the  bald,  raw,  bare,  unblushing  facts.     Therefore,  get  the  facts!" 


Page  96 


CHAPTER  XVII 
REPRODUCTION  OF   FORMS 


Page  97 


p.,« 

DBLCO.IIOHT  DEALERS   BOOKKEEPINC 

CASH    RECEIVED 

SYSTEM 

o.,c 

-SMSS— 

T 

• 

MMuKSll 

.cSSST,. 

E.?-sc.°^:, 

,»■;;„ 

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O.T 

ot 

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OEB.T 

DC 

O— 

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" 

___ 

r^- 

L^ 

_^^=^^^_^=- 

DLD-l 


Page  98 


DELCOLICHT   DEALERS   BOOKKEEPING    SYSTEM 
CASH      PAID 

P>«* 

. . — .                       , 

=o 

d.te 

"-a  Bar-. 

'«'  </ 

Essa?     . 

-°Toun"is              0 

"SSffl 

C8Co"u"«T 

DEBIT 

DEBIT 

.EDIT 

CREDIT 

T 

' 

y~> 

=<J 

1 

...               ___ 

Page  99 


DLD-2 


P.K 

DELCOL1GHT    DEALERS    BOOKKEEPING    SYSTEM 

JOURNAL 

„,,__ ===== 

«« 

ACCOUNTS 

• 

..... 

o 

r^- 

^s- 

1  '   ' 

-    ■■    — —    -     — 

DLD-3 


Page  100 


3ELCO-UGHT    DEALERS    BOOKEEPING    SYSTEM 

PITRCHASE     REGISTER 

P.sc 

. 

=CJ 

O.TE 

'." 

„ 

V 

V«°.°a"ES 

Arss"s 

'J&YtY 

TSfffS 

iSmXSm 

UPENHl 

C«EO,T 

DEBIT 

D"'T 

DOT 

l 

-o 

-vj 

Page  101 


DLD-4 


DELCO. LIGHT    DEALERS    BOOKKEEPING    SYSTEM 


L^_                                                                                          SAI.KS     RKKISTKR 

l     - 

"£' 

R*E 

&8SS, 

OTAL 

PL,»,s.«.B.ns™s 

PUMP. 

o= 

111 

DEBIT 

'  "««»           co 

ST  P«,CE              S. 

ESPR.CE      |CC 

STPR.CE         I       S. 

ESPR.CE 

' 

H 

^~>l__ 

n 

^_^~- 

r1 

, 

! 

I. 

, 

...j.. 

DLD-5 


Page  102 


DELCOLIGHT    DEALERS    BOOKKEEPING    SVSTEM 

SALES     REGISTER 

r«c 

=o 

Accessories 

W.R.NG  M.TER..L 

F..TURF.S 

SCRV.CI  PARTS 

MiSCELLANtOUSS.LtS 

B.LMPR.C* 

1 

=n 

-  w 

Page  103 


DLD-5 


DELCO-LIGHT    DEALERS    BOOKEEPING    SYSTEM 

LEDGER 


sheet  no                                                                  Name  of  account                                                                                                                                                     account  No. 

.... 

■  TE„ 

';? 

....  / 

OE„,TS 

OEB,T 

—                CEO 

EO.TS 

"o' 

,TE» 

O.TE             |" 

1 

-    ^~> 

-\J 

1 

_ 

I 

, 

DLD-6-7-8 


Page  104 


o  O 

a  < 

£  o 

0  > 

g  O 

1  £ 


l       ! 


S 

-111 ------------------------------- 


DLD-14 


Page  105 


DELCO- LIGHT     DEALERS    BOOKKEEPING    SYSTEM 

BALANCE    SHEET— ASSETS 


.COT 

N.MF.OF 

FEBRUARY 

MARCH 

APRIL 

MAY 

JUNE 

r^— 

no    |        Accounts 

ACCOUNT     |        TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOT.CS 

ACCOUNT 

TOTALS 

Ls~ 

II     I  Land 

T 

1 

12     |  Omldinos 

13    I  Fair  Exhibit  Blags. 

16    1  Machines  Shop  Eq 

17     I  Furniture  8  Fiilures 

18 

Demonstrating.  Equipl 

19 

Automobiles  &  Trucks 

26 

Reserve  (or  Dep- 

2? 

i";i   i  W  i  |  B  Evelp  I 

29 

Tola!  Fiied  Assets 

31 

Cash  In               Bank 

33 

Impee...  Fund 

34 

Postage,  Carlare.  etc 

36 

Accounts  Receivable 

37 

Holes  Receivable 

38 

Trade  Acceptances  flee 

39 

Prospective  Comm.  flee 

40 

Credit  Bat  with  Dis 

«l 

Advanced  Ftp  Accls. 

42 

Pi ni  Accounts 

43 

Detail  Blltncef.  etc 

4C 

fleserve  tor  Unc.  flee. 

51 

Inventor/.  Plants  £  B 

52 

Inventory.  Pumps 

53 

Inventory,  Accessories 

54 

InventoT.  Wirino  Mat 

55 

law  tnfvrf,  Fbmrti 

56 

Inventory,  Service  PtJ, 

57 

Inventory,  Misccll 

60 

60 

Cnnsianed  Goods 

71 

Investments 

r^ 

'      79 

lolsl  Ciiireat  Ailet-. 

C  r- 

01 

lltltrttl  PrBM  ' 

82 

Inturini  ■  Prepild 

89 

Total  Preen*  Assets 

09 

traod  Tatal  Assets 

DLD-9 


Page  106 


DELCO-L1GHT    DEALERS    BOOKKEEPING    SYSTEM 

BALANCE    SHEET— ASSETS 




JULY                                           AUGUST                                  SEPTEMBER 

OCTOBER 

NOVEMBER 

DECEMBER 

^o 

ACCOUNTS 

OUNT     II       TO 

T.US        J     ACCC 

UNT              TO 

TALS 

=co, 

NT     [I       TC 

T.LS 

KCCO, 

NT    I!        TO 

ALB 

NT     F    TOT 

"S 

AC 

TALS 

It 

Und 

!j     1 

! 

T 

12 

Buildings 

13 

Fjir  t»ruuil  Biuo- 

16 

Machinery  Shop  Fq 

17 

Furniture  &  Fixtures 

IS 

Oemonstratino  Equip) 

19 

Auiomob.les  &  Trucks 

■a 

Reserve  lor  Dcp 

27 

Good  Will  &  Develp'l 

29 

Total  Fued  Assets 

31 

Cash  In  Bank 

33 

Imprest  Fund 

34 

Postacje  Carlare,  etc 

36 

Accounts  Receivable 

37 

Notes  Receivable 

38 

Trade  Acceptances  flee 

Advanced  Fip  Accts. 

42 

Personal  Accounts 

43 

Debit  Balances,  etc 

46 

Reserve  tor  One  Rec 

51 

Inventory,  Plants  &  B 

62 

Inventory.  Pumps 

53 

Inventory,  Accessories 

54 

Inventory.  Wiring  Mat 

55 

Inventory,  Fiitures 

56 

Inventory,  Service  Pis 

57 

Inventory.  Miscell 

60 

Consirjnmenl  Invenlury 

66 

^—N                                    " 

Investments 

=o       » 

Total  Current  Amis 

•■ 

82 

Insurance  Prepaid 

B9 

Total  Prepaid  Assets 

- 

99 

Stand  Tilil  Amlt 

u. 

Page  107 


DLD-9 


DELCO-LIGHT    DEALERS    BOOKKEEPING    SYSTEM 

BALANCE    SHEET  — LIABILITIES  and   NET  WORTH 




AMOUNTS 

JANUARY 

FEBRUARY 

MARCH 

APR,L 

- 

s~\ 

"° 

ACCOUNT    | 

TOTALS             AC 

™»T    J       TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS      |      ACCC 

"" 

TOT 

ILS             ACCO 

JNT              TOTAL 

o 

101 

Mortpaoes 

T 

102 

Una  Term  Noies 

109 

Iilil  Fuel  Liabilities 

III 

Accounts  Payable 

112 

Notes  Payable 

113 

Trade  Acceptances  Pay 

114 

Prospective  Comm  Pay 

115 

Credit  Balances,  etc 

III 

Comioned  Goods 

121 

Accrued  Salaries 

122 

Accrued  lam 

123 

Accrued  Interest 

129 

Total  Current  liaklitie 

181 

ClplUl— Original 

182 

Capital— Additions 

188 

Profit  £  Loss 

189 

Toui  He)  Worth 

J 

Ot= 

^  > — 

1 

DLD-10 


Page  108 


DELCO- LIGHT     DEALERS    BOOKKEEPING    SYSTEM 

BALANCE    SHEET  — LIABILITIES  and   NET  WORTH 


NTuO, 

JULY                                           AUGUST 

SEPTEMBER 

OCTOBER 

NOVEMBER 

DECEMBER 

=o      -1 

TOTALS      J      ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS 

ACCOUNT 

TOTALS 

101 

Mortgages 

T 

102 

Long  Term  Notes 

109 

Tola!  Filed  Liabilities 

111 

Accounts  Payable 

112 

Notes  Payable 

113 

Trade  Acceptances  Pay 

114 

Prospective  Comm.  Pay 

115 

Credit  8alances.  etc 

118 

Consigned  Goods 

121 

Accrued  Salaries 

122 

Accrued  Tales 

123 

Accrued  Interest 

129 

Total  Correal  liabilities 

181 

Capital — Original 

182 

Capital— Additions 

186 

Profit  &  Loss 

187 

Surplus 

189 

Total  «et  Worth 

I  Grand  Total 

1  Liabilities  S  Mel  Worth 

—' 

Page  109 


DLD-10 


DELCO-LIGHT    DEALERS    BOOKKEEPING    SYSTEM 

TRADING    ACCOUNTS 


JANUARY              1 

FEBRUARY 

MARCH 

APR.L 

JUNE 

r\_ 

NO 

ACCOUNTS 

ONT„ 

YEA- 

MONTH         |            ,«. 

monthJ 

VEfR 

"™ 

,„           | 

""1        ||     s*"""" 

« 

" 

M 

3NT„ 

u> 

O— 

207 

211 

Cost  Ol  Plinls  &  B. 

219 

ItUI  Coil  of  boll  Sail 

| 

221 

Bross  P.olil  on  P.  (  B. 

222 

223 

doss  Prol  1  on  A 

224 

.    226 

GfoSS  Profit  on  Ser.  P. 



227 

Cross  Prolil  on  M  S. 

301 

/~^ 

^   i — 

l                                       ll 

DLD-ll 


Page  110 


DELCO-LIGHT    DEALERS    BOOKKEEPING    SYSTEM 

TRADING    ACCODNTS 


A^ol^S 

JULY 

AUGUST 

SEPTEMBER 

NOVEMBER 

DECEMBER 

=o 

»»«'» 

YEAR 

MONTH 

YEAR 

MONTH 

YEAR 

MONTH 

YEAR 

MONTH 

«»« 

MONTH 

"" 

201 

T 

202 

Sales  of  Pumps 

203 

Sales  of  Accessories 

204 

205 

206 

207 

Miscellaneous  Sales 

209 

Gran  S|!es 

211 

212 

Cost  of  Pumps  Sold 

213 

215 

216 

1 

217 

Cost  of  Miscel  Sales 

219 

r 

221 

222 

224 

1 

225 

Gross  Prolil  on  Fill. 

4- 

| 

T\ 

227 

Gross  Prolil  on  M.  S. 

: 

, 

t- 

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=T) 

Page  111 


DLD-11 


DELCO-UCHT    DEALERS    BOOKKEEPING    SYSTEM 


rear  192 

PROFIT 

AND 

LOSS 

STATEMENT 

Form 

DLL. 

C.U 

UCI 

N.MEOF 

JANUARY 

FEBRUARY                                 MARCH 

APRIL 

MAY 

JUNE 

NU 

Accounts 

MO,. 

T„ 

YEAR 

.ONTH 

TEAR           1         MONTH 

YEAR 

MONTH 

VE.R 

MONTH 

.£«» 

MONTH 

YEAH 

o 

301 

Gross  Profits  on  Sales 

1 

302 

Interest  on  Reeeivbls 

303 

Interest  on  Bank  Deo. 

304    |    Income  from  Invest 

305 

Cash  Discount  on  Pur. 

30S 

Miscellaneous  Income 

309 

6nJis  Pram. 

401 

Salary  ol  Dealer— Part 

402 

Salaries  ol  Salesmer, 

403 

Commission  to  Salesm. 

404 

Prices  and  Awards 

405 

Iravelinrj  Ejpenses 

40G 

Conveniens  I  Schools 

4 

408 

Advertising 

T 

409 

Posters  &  Signs 

410 

Fairs  &  Exhibits 

412 

Service  Salaries 

413 

Service  Material 

414 

Service  Expenses 

416 

Shipping,  elc. 

417 

Freight,  Express,  etc. 

418 

Garaoe  Expenses 

421 

Breakage,  Claims,  elc 

429 

Miscellaneous  Sel.  Ex. 

499 

Total  Sellina  Eioensci 

501 

Salary  ol  Dealer— Pan 

502 

Salaries  ol  Clerks 

503 

Olfice  Expenses 

.  n 

504 

Rent 

505 

Linht.  Heat.  elc. 

500 

Telephone,  etc. 

507 

Insurance 

SOS 

Tans 

501 

Interest,  Oij.  8  Ex. 

tin 

lUpaIn  f.  Benewili 

511 

Depreciation 

512 

Uncllrctable  Accounts 

f~Y_ 

518 

Mi  i  elbflMttl  U  n  1  > 

>W 

590 

Total  Gtacral  Eiprnsri 

i»  m 

lolal  Expenses 

180 

Prolil  aid  lost 

1 

1  ! 

TTT 

l 

DLD-12 


Page  112 


DELCO-LIGHT    DEALERS    BOOKKEEPING    SYSTEM 

PROFIT    AND    LOSS    STATEMENT 


JULY 

AUGUST 

SEPTEMBER 

OCTOBER 

NOVEMBER                            DECEMBER 

=o 

AMOUNTS 

3NTH 

.»« 

MONTH 

EAR 

DNTH        I 

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LL  . 

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— T 



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Page  113 


DLD-12 


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Page  114 


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Page  115 


DLD-15 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


CHAPTER  XVIII 


BALANCE  SHEET 


Dated  December  31,  1919 


Fixed  Assets: 


ASSETS 


Land,  Buildings  and  Improvements, 

Office,  Shop  and  Demonstrating  Equipment 

Automobiles  and  Trucks, 


Less  Reserve  for  Depreciation, 
Current   Assets: 

Cash  on  Hand  and  in  Bank, 

Accounts  Receivable, 

Notes  Receivable, 

Trade  Acceptances  Receivable, 

Prospective  Commissions  Receivable, 

Other  Receivables, 

Less  Reserve  for  Uncollectables, 


Inventories, 
Consigned  Goods, 
Investments, 

Prepaid  Assets: 


Interest  Prepaid, 
Insurance  Prepaid, 

TOTAL  ASSETS:    - 


$1,000. 

800. 

1,000. 

2,800. 

150. 


500, 
3,000. 
800. 
400. 
120. 
35. 

4,855. 
245. 

4,610. 
2,000. 

150. 

500. 


25. 

25. 


$2,650. 


7,260. 


50. 


$9,960. 


Page  116 


BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Fixed  Liabilities: 

Mortgages, 

Long  Term  Notes, 


*BALANCE  SHEET 

Dated  December  31,  1919 
LIABILITIES  AND  NET  WORTH 

$500. 


$    500. 


Current  Liabilities: 


Accounts  Payable, 

Notes  Payable, 

Trade  Acceptances  Payable, 

Prospective  Commissions  Payable, 

Other  Payables, 

Consignments  Payable, 

1,500. 

1,000. 

200. 

75. 

Accrued  Salaries  and  Wages, 
Accrued  Taxes, 
Accrued  Interest, 

200. 
100. 

75. 

3,150. 

Net  Worth: 

Capital, 
Surplus, 

4,350. 
1,960. 

6,310. 

TOTAL  LIABILITIES  AND  NET  WORTH 

Contingent  Liability  for  Receivables  Discounted, 
Unfilled  Orders  on  Hand, 

$2,750. 
$3,635. 

$9,960. 


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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 


Gross  Sales, 

Less  Returns  and  Allowances, 

Net  Sales, 

Cost  of  Goods  Sold, 

GROSS  PROFIT  ON  SALES       - 

Expenses: 

SELLING  EXPENSES: 

Sales,  Salaries  and  Commissions, 
Other  Sales  Expenses, 
Advertising  Expenses, 
Service  Expenses, 
Shipping,  Freight  and  Garage, 
Miscellaneous  Selling  Expenses, 

GENERAL  EXPENSES: 
General  Salaries; 
Office  Expenses, 
Insurance,  Taxes  and  Interest, 
Repairs  and  Depreciation, 
Uncollectable  Accounts, 
Miscellaneous  Administrative  Expenses 

TOTAL  SELLING  AND  GENERAL  EXPENSES 


PROFIT  AND  LOSS  STATEMENT 

For  Six  Months,  Ending  December  31,  1919 

$30,000. 

250. 


29,750. 
22,600. 


NET  PROFIT  ON  SALES 


$7,150. 


2,100. 

120. 

150. 

900. 

75. 

10. 

$3,355. 

1,350. 

220. 

100. 

175. 

25. 

20. 

$1,890. 

$5,245. 
$1,905. 


*   Percentages 


.25 
.03 


4.5 
.7.°. 

.3;; 

.59 
.08 
.07 


100. 
.83 

99.17 
75.34 

23.83 


11.18 


6.30 

17.48 
*6.35 


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BOOKKEEPING     SYSTEM     FOR     DELCO-LIGHT     DEALERS 

*PROFIT  AND  LOSS  STATEMENT 

For  Six  Months,  Ending  December  31,  1919 
NET  PROFIT  ON  SALES  _____---         $1,905. 

Other  Income: 

Interest,  $10. 

Income  from  Investments,  15. 

Purchase  Discounts,  25. 

Miscellaneous  Income,  5. 

TOTAL  OTHER  INCOME         -------  $55. 

Total  Net  Income  (For  Six  Months)    -------  $1,960. 

Surplus  from  Previous  Operations   (For Years Months)        -  -  . 


SURPLUS  TO  DATE,  December  31,  1919,  ------         $1,960. 

'NOTE — Although  the  figures  used  in  the  Balance  Sheet  and  Profit  and  Loss  Statement  should  not  be  taken  as  a  criterion  of  an  individual 
business,  it  is  particularly  important  that  a  correct  understanding,  especially  of  the  percentage  figures,  be  had.  so  that  they  can  be  applied  to  an 
individual  business  when  working  with  actual  figures.  The  percentages  mean  that  for  every  3100.  worth  of  GROSS  SALES  (not  Invested  Capital) 
which  a  dealer  makes,  he  has  $6.35  NET  PROFITS  after  paying  for  the  goods  and  all  expenses  of  operating,  including  his  own  salary  paid  to  him  or 
at  least  charged  against  the  business. 

Interpreted  in  dollars  and  cents,  and  computed  on  a  monthly  basis,  these  figures  illustrate  the  following  principal  points: 

Gross  Sales  $5000. 

Gross  Profit  on  Sales  1191.50 

Total  selling  and  general  expenses,  including  an  allowed  Dealer's  salary  of  $200  874. 

Net  profit  on  sales,  after  deduction  of  Dealer's  Salary  317.50 

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